February 26, 2020

Heartcore's Consumer Technology Trends 2020 report

Consumer-focused VC firm Heartcore outlines the three big trends set to shake up the sector in 2020.

Amy Lewin

7 min read

Supported by


Early-stage venture capital investor Heartcore is one of a rare breed: the Copenhagen, Berlin and Paris-based fund focuses solely on consumer technology businesses. Its portfolio is packed with interesting brands, from Berlin-based travel activities platform GetYourGuide to London-based dark kitchen startup Taster, Stockholm-based fertility tracking app Natural Cycles to Budapest-based presentation software Prezi. 

As a result, Heartcore's team likes to think that they know consumer better than pretty much everyone else on the block. 

This year, Heartcore has wrapped all of its insights on the sector into its first Consumer Technology Trends report.


We sat down with Heartcore partner Yacine Ghalim to find out what he thinks are the most fascinating shifts heading for all consumer businesses.

Headshot of Yacine Ghalim, partner at Heartcore.
Yacine Ghalim, partner at Heartcore.
Give me the big picture — what’s the state of consumer, in the US versus Europe?

As Europeans, it’s easy to see the glass as half empty — but Europe is actually the world’s second largest consumer market and, if you include government spending, Europe is actually on par with the US. Another big difference between Europe and the US or China is that wealth is more evenly distributed; the middle class is quite a bit bigger. In the US there is a lot of focus on the top 10% of consumers. In Europe the picture is more balanced. We have this investment thesis called ‘The Bottom 90%’ — we particularly like to invest in companies addressing the rest of the population.

What’s a good example of that?

We recently invested in French company La Fourche. It’s a grocery retailer structured as a members club; people pay for the right to shop there. It sells only organic and natural products — food, beauty, cleaning, baby care — then sells them at a very small margin — at a discount of 30-40% to the price at the local supermarket. It’s a good example of how you can democratise sustainable consumption. The top 10% of the population is used to buying organic products, but in many European countries that’s still a privilege of the top 10%. La Fourche is really changing that.

How are consumer brands adapting to rising customer demand for sustainable products and more environmentally-friendly goods and services? And not just for the 10%?

Sustainability is having a cultural moment, big time. It’s one of the most — if not the most — important shifts happening at the moment. Now companies and investors like us think that it’s not just the right thing to do, but the only thing to do. If you’re a consumer-facing business, it’s what consumers are saying loud and clear.

We can vote with our wallet, and make a difference with how we consume

We’ve gone far down the path of consumerism, defining ourselves by our purchasing power. Now we realise that we can vote with our wallet, and make a difference with how we consume. The younger generation feel like they’re making a difference through the stuff they buy.

What are some good European examples of consumer brands that have sustainability baked into them — and aren’t more expensive, or less convenient?

People associated sustainability with a trade off — it was always less convenient or more expensive. That’s changing as we see companies making sustainability sexy and less exclusive.

A good example in the UK is energy company Bulb, which is growing phenomenally fast because people want their energy to be clean — but not necessarily more expensive. La Fourche is also an example of that; it’s cheaper and more convenient because it’s shipped to your door. Why would you not do it?

Another example I like is French company Backmarket, which is built on the premise that many people would rather buy consumer electronic devices second hand, refurbished or reconditioned, but a little bit cheaper than if they were new — with the added benefit that they’re not producing something new or using more resources. It’s on a phenomenal growth trajectory and it’s really nailed this idea of making sustainable sexy.

How important is trust, these days? What are some examples of the impact trust has on consumer brands?

It’s super important. We’re right in the middle of a trust crisis in the consumer economy. That’s why we think it’s a particularly interesting time. It creates what we call trust gaps, where startups with a fresh tone, which talk the same language as consumers, can emerge and exploit those gaps. Entire consumer categories can be reshuffled or redefined by upstarts.

Companies like Lillydoo, which sells skin-friendly babycare, promise the consumer how their product is going to be. If it so happens that the promise is not 100% fulfilled, the important thing is to be upfront about it — very transparently say we made a mistake, we’re going to make it right and this is how. At the end of the day everyone is human, everyone makes mistakes, but what consumers hate is companies that try to hide their mistakes.

What’s another trend that you find super interesting?

In many areas renting is becoming the default. Before, if you could afford something you would own it, not rent it. Today, that’s changing for cars, houses, toys, furniture, clothes and electronic devices. It shows that, as consumers, our value system has changed a bit. Consumers value flexibility a lot more, and ownership is less of a status symbol.

Consumers value flexibility a lot more, and ownership is less of a status symbol
What kind of an investor are you? What is your relationship with founders and portfolio companies like?

We’re conviction-based and thesis-driven; we know what we like, so when we see it in front of us we can recognise it quickly, make a decision fast and embrace risk. We like to think of ourselves as fairly independent thinkers. Besides that, we stand for two things: we’re a consumer-only tech investor in Europe and we put founders first. That’s how we behave in good and bad times.

The Heartcore team

We’re the coach, not the athlete; founders are the athlete. We’re here to help you grow your company, grow as a leader and realise your full potential. That’s our modus operandi. We like to be the first one you’d call when things are going well or when things are going badly. We’re good guys, we’re not here to screw people over.

Other than that, we do what everyone else is doing — help with strategy, fundraising, recruiting — but we think we do it better for consumer-facing companies. When you only do one thing you tend to become better at it; your network caters to it, your experience is more directly relevant and because our portfolio companies are fairly similar they can help each other out.

How do founders help each other?

It’s a work in progress, but something we’re putting a lot of effort into. People like to meet in person, so we organise topical events, either by function or by industry, for example bringing all our healthcare chief executives together to talk about what it’s like to build a healthtech startup. How do you handle scientific research? What about public communication? 

How are you as a firm seeking to become more diverse, in terms of your team, and your portfolio? And why?

In the partnership, we come from many countries, ethnic backgrounds, religions, speak many languages — but also we come from very different social backgrounds. We need to invest to change the status quo for different categories of people. If those categories are not represented within our team, it’s a lot harder to really feel that something is interesting and could be transformative. It’s a problem in the venture capital industry as a whole, this lack of diversity, because it leads us to invest in the same types of companies. Most venture capitalists are fairly wealthy, live in urban areas, are short on time and so value convenience a lot. But that’s not the case for most of the population.

It’s important as a consumer investor to make diversity a core component of your strategy

If all funds are similar, it’s difficult to see something great that answers a completely different set of needs. That’s why it’s super important as a consumer investor to make diversity a core component of your strategy.

This interview originally appeared in Heartcore's Consumer Technology Trends 2020 report. Click here to download.

Amy Lewin

Amy Lewin is Sifted’s editor and cohost of Startup Europe — The Sifted Podcast , and writes Up Round, a weekly newsletter on VC. Follow her on X and LinkedIn