Heartcore Capital, one of the few VCs to focus on consumer technology, has raised a $200 million early-stage fund for those kinds of startups across Europe. Heartcore IV, the firm’s flagship investment vehicle, will be supported by Heartcore Progression Beta, a $50 million "opportunity fund" for follow-on rounds in consumer tech.
The firm said both vehicles were oversubscribed. Investors in the funds include Hermann Haraldsson (Boozt), Andrew Stalbow (Seriously), Phillip Chambers and Kasper Hulthin (Peakon), Paul Crusius and Marco Vietor (Audibene), Morten Strunge (Podimo, Mofibo) and Max-Josef Meier (Finn).
Most European VCs tend to be B2B/SaaS focused, but Heartcore has specialized in consumer technology VC.
In Heartcore’s favour is the fact that there are 500 million consumers in the EU spending an annual $11 trillion, making it on-par with the U.S. consumer market. It also has a larger middle class. And while B2B platforms must usually win the U.S. or at least originate from there, the B2C market tends to be more local.
The pandemic has also acted as an accelerant for consumer technology, forcing populations to take up digital services such as online groceries.
Heartcore has had a 14-year history in consumer tech, with its portfolio raising close to $1 billion in follow-on financing over the past 12 months, the company said.
Swedish consumer personal finance manager Tink’s recently sold to Visa for $2.2 billionN, and Heartcore was the largest venture investor at the time of acquisition.
It has also invested in virtual restaurants (Taster), open banking (Tink), quick-commerce (Weezy), fashion e-commerce (Boozt), cellular agriculture (Gourmey), digital health (Kaia Health, Natural Cycles) and subscription commerce (La Fourche, Italic).
Max Niederhofer, Heartcore Capital partner, told me: “Europe historically has been great at consumer tech. You’ve had Skype, Last fm, Spotify and Supercell. All of those are consumer companies. I think the thing that's happening is that a lot of the consumer champions are domestic champions. Lando is huge in Germany. The biggest insurance tech company in France is actually a French company. So, as technology disrupts every consumer spend category, there's a lot of big companies being built in Europe that are primarily domestic or regional, and that's where we feel there's a lot of room to play.”