Heartcore Capital, one of the few venture capital firms specializing in consumer technology, has established a $200 million early-stage fund for such companies in Europe. Heartcore Progression Beta, a $50 million “opportunity fund” for consumer tech follow-on rounds, will support Heartcore IV, the firm’s flagship investment vehicle.
Both vehicles were oversubscribed, according to the company. 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 (Podimo, Mofibo) are among the fund’s investors (Finn).
Heartcore has specialized in consumer technology VC, while other European VCs are focused on B2B/SaaS. The fact that the EU’s 500 million consumers spend $11 trillion annually, putting it on pace with the US consumer market, is in Heartcore’s favor. It has a greater middle class as well. While B2B platforms must often win or originate in the United States, the B2C market is more regional.
The pandemic has also accelerated consumer technology adoption, requiring people to use digital services like online grocery shopping. Heartcore has a 14-year track record in consumer technology, with its portfolio garnering nearly $1 billion in follow-on funding in the last 12 months, according to the business.
Tink’s, a Swedish consumer personal finance company, was recently acquired by Visa for $2.2 billion, with Heartcore being the leading venture investor at the time.
In addition, it has 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 (Subscription Commerce) (La Fourche, Italic).
“Europe has always been exceptional at consumer tech,” Max Niederhofer, a partner at Heartcore Capital, told me. Skype, Last.fm, Spotify, and Supercell are just a few examples. Those are all consumer-oriented businesses. I believe what is occurring is that many of the consumer champions are also domestic champions. In Germany, Lando is extremely popular. The largest insurance technology firm in France is also based in France. As technology impacts every consumer spending category, a lot of significant companies are being formed in Europe that is primarily domestic or regional, and we believe there is a lot of room to play there.”