Episode #1: Consumer Tech Napkin | Fundraising & Benchmarks in Consumer Tech

The conversation explores everything from customer love and community engagement to the growing influence of AI-generated content on social platforms, and what that means for founders trying to build authentic consumer brands in an increasingly noisy landscape. 

Continuing the Conversation: The Metrics That Matter in Consumer VC

We've also published our latest blog to accompany our first episode: The Metrics That Matter in Consumer VC, where we explore the signals, KPIs and behavioural trends investors are paying closest attention to across modern consumer businesses. 

This marks the first release as part of the True × EUVC partnership, with more conversations, founder perspectives and market insights to come. 

Let’s start with the bad news: there is no “one size fits all” when it comes to key metrics in Consumer.

That can make it scary for investors that are more at home with the alphabet soup of B2B SaaS metrics: annual recurring revenue (ARR), lifetime value (LTV), customer acquisition cost (CAC), net revenue retention (NRR), burn multiple, magic number, rule of 40, and so on. Consumer tends to be more nuanced and idiosyncratic - for many, a minefield not worth stepping into.

As a result, it’s harder to define a generic list of the ‘most important’ metrics for Consumer. 

It will vary with sub-category (e.g. social vs. travel), business model (subscription vs. transactional vs. ad-funded), distribution model (B2C vs. B2B2C), and so on. For obvious reasons, comparing Robinhood to AirBnB on daily active user retention is nonsense, but they’re both worth ~$70bn at the time of writing. The devil, as ever, in the detail.

That said, we want to provide some guidance to Consumer entrepreneurs when it comes to metrics to be thinking about: not just as you head into fundraising, but as general health markers on your business. But first, a caveat: these are neither universally relevant (i.e. they do not apply to all businesses), nor universally valued (i.e. different investors view the world differently), nor exhaustive (i.e. they are not the 

Before diving into specifics, it’s worth outlining what we are trying to understand about a business through the lens of metrics. Fundamentally, we need to believe that the business:

If all those things are true, we get excited.

Each of them can be mapped to a few example metrics. As with any metrics, all of the below are most powerful when shown in the context of benchmarks (we include some below - with a big h/t to a16z in particular), and/or historical trends. Metrics are also much more believable and valuable with significant sample sizes: ideally at least a thousand users as a rule of thumb.

Creates value for its user(s) over a sustained period of time

The best sign a product creates value is that a user engages with it.

For transaction-based businesses, the key measure of engagement is obvious: the customer transacts. For Consumer Tech businesses that are usage-based, it can be blurrier. We are typically most interested to understand how frequently and deeply users engage.

As an aside: be intellectually honest with your definition of ‘Active’. Is opening an app for 2 seconds 

The second part of what we want is to see that this value to the user endures over a sustained period of time i.e. the customer interaction is not “one and done”. This shows up in retention metrics, which can come in a few different forms:

User love is necessary but rarely sufficient. 

At some point all businesses have to make money, and it’s here that many consumer businesses become unstuck. For us as an investor, the threshold of ‘proof’ around monetisation depends on the stage and type of company - and again, the devil is in the details.

Early on, there can be logic to pushing monetisation out on the time horizon. Introducing friction to user adoption can be counterproductive, for example if establishing network effects is important to the core value proposition (4) or if a steady flow of early user cohorts is required for rapid experimentation and iteration. By contrast, a single-player app in an established category has fewer excuses to defer monetisation.

This could be an entire blog post in itself, but to simplify to a basic rule of thumb: the stronger the logic for why monetisation should be deferred, the less scrutiny investors will place on it in an early-stage funding round.

A final point of context for the “value capture” discussion is the importance of contribution (revenue minus variable costs).

Revenue is a good marker of product value for a customer, but contribution is the ultimate driver of value creation for companies. Revenue growth and market size can be misleadingly flattering if the product is being sold at an uneconomic price: there will be infinite demand for a company selling £10 notes for £5. This focus on margins is an increasing topic of discussion in an AI era where the marginal cost to serve (inference) is higher than traditional software businesses.

There are some circumstances where low or even negative contribution margins can be acceptable, including where (i) variable costs reduce materially with scale (e.g. amortising large fixed costs over a larger user base); (ii) pricing power increases materially with scale (e.g. you have network effects); (iii) your beachhead product is a loss leader; and/or (iv) you have a capital advantage that can bridge you until competition fails and you have pricing power. Absent these, beware the allure of selling pounds for pennies.

With the above pre-amble and context covered, let’s move on to the specific metrics we look at to evaluate the health of a business that is monetising:

Economically viable and scalable growth engine

The third broad area we want to assess is how the company will grow. 

Fast growth is a necessary pre-condition for the venture-scale outcomes we are looking for and so it’s a key input into the underwriting criteria. That said, not all growth is created equal. 

Organic growth - especially though word-of-mouth, referral and product virality - is typically better than paid growth.

Paid marketing is not necessarily a taboo - Meta and Google are great enablers of direct-to-consumer and a big net benefit to consumer companies in general and start-ups in particular - but it can also drive flattering topline growth that can mask major flaws in the value creation equation. Existing customers passionately advocating your product to others is the gold dust that consumer businesses thrive on.

Benefits from compounding advantages and defensibility over time and at scale

Finally, we want to understand how the business gets more defensible over time.

There are a few ways defensibility compounds in Consumer. 

A detailed walk through of these is beyond the scope of this article, but they include things like network effects (i.e. product value grows as the user base grows - see 

 for a great summary), scale economies (albeit hard to apply to a start-up, by definition), switching costs (i.e. it’s painful to move to a competitor) and brand.

At the early stages, many of these can be hard to prove out, and the nuance is so important that it’s difficult to be prescriptive on the exact metrics and analysis.

Rather than specific ‘new metrics’, usually the best way to show this is by cutting the above engagement, retention and monetisation metrics by different user cohorts. Cohorts can be based on time (i.e. “May 2025 users D30 is 5%pts better than January 2025 users”) or behaviours (i.e. “Users who connect with 5 friends have a DAU/MAU ratio 2x those that connect with 1 friend”). 

The best case scenario is a compelling qualitative logic linked to the core insight into the problem you’re trying to solve combined with proof points that substantiate your initial hypotheses.

To pull back from the details, the most important thing is that metrics will only ever tell part of the story of whether or not a business has potential to deliver a venture-scale outcome. Particularly at the earliest stages, the data is often noisy, inconsistent and incomplete. Of course any investor will want to see numbers, but it will only ever be one input into their decision.

The final point is that we expect founders to have their own point of view on what metrics are important, and why. We want founders to be 

 with the problem they are solving, and rigorously running experiments to figure out how to get the product or business ‘working’. For us, the sense that a founder is chasing arbitrary benchmarks simply to get a funding round closed is much less compelling that a founder that comes with solid hypotheses on why their product unlocks a new consumer behavioural paradigm, backed up with compelling data.

In other words, optimise for building a great business and the numbers (and capital) will follow.

“We generally find that the longer Redditors have been on Reddit, the more engaged they become. As of December 2023, when someone first makes an account, the average active minutes for logged-in users on Reddit starts at approximately 20 minutes per day, but increases to over 35 minutes a day for those who have been on Reddit for over five years and even over 45 minutes a day for those who have been on Reddit for over seven years.”

Note: this should not be confused with “unbounded” (also known as “on or after”) retention, which is typically less informative.

In this scenario we’ll look at usage retention as a proxy for value.

(4) Snapchat waited 3 years from launch to sell its first ad, at which time the user base was already over 50m users, though they did try other monetisation initiatives earlier on e.g. the Lens Store (source: 

). By contrast, Facebook started selling ads from year 1 and registered $9m in revenue in year 2, followed by $48m (!) in year 3 (source: 

Thanks to the magic of compounding, 5% weekly growth is 13x year-on-year!

We’re excited to announce a new partnership between True and EUVC, bringing together conversations, perspectives and insights focused on the future of consumer and venture. 

In our first episode, Joe Seager-Dupuy and Andreas Munk Holm are joined by Susan Lin from Felix Capital and Sameer Singh from Speedinvest to discuss what really matters in consumer VC today. 

EUVC x True | Launching Our Partnership and The Metrics That Matter in Consumer VC

The Metrics That Matter in Consumer VC

Private equity is looking elsewhere, and many investors show no interest in small and mid-sized retailers, but True co-founder Matt Truman sees opportunity in the industry.

It's official: our industry is despised by investors and government in equal measure.

Last year, the world of private equity allocated just 3% of all its capital to our global sector as it preferred to chase the single most crowded trade in history, technology.

Meanwhile, anything with a listed market cap of less than £1bn is increasingly not worthy of even coverage, let alone deep research and considered analysis.

UK retail is the largest private sector employer, responsible for nearly one in 10 workers. When combined with the consumer sector, it comprises 410,000 active firms and delivers just under 20% of UK GDP. Put simply, it is the single largest ecosystem by both employment and business volume that spends its days feeding and clothing people.

Yet this and previous governments have chosen to bombard it with taxes and legislation that hinder investment and offer little to benefit the underlying consumer or the retail flywheel.

Few realise or think about the fact that it is an industry that will probably be a net beneficiary of Al. Few think about its wider social impact, especially offering youth employment opportunities and the power of human interaction. Few think about the extraordinary array of talented, proven, and successful entrepreneurs we have at our disposal. Almost no one thinks about how to cherish and actually invest in it. At least not in the UK.

. He's Germany's first federal minister for digital transformation and government modernisation, and a former chief executive of 

, one of Germany's leading retail groups. Dr Wildberger outlined a vision and a plan that is completely lacking in the UK.

He believes that ‘retail is infrastructure for everyday life’ that keeps cities alive and communities connected. Retail represents 26 million jobs in Europe, roughly one in seven, which means retail policy is also employment policy, skills policy, social policy, and opportunity policy.

He is firm on fair competition and community security being more important than the rights of criminals, and his plans were succinct and well-structured. The UK is crying out for a similar vision and a plan. Meanwhile, we have been waiting for three years just to close the de minimis tax loophole. It is breathtakingly pedestrian.

I believe that Al will be one of the great enablers for our industry over time.

Retail is complicated and ever-changing. It involves lots of people. It moves goods across continents. Those goods often have shelf lives. Wars, pandemics, and geopolitics have a nasty habit of disrupting supply chains. And consumers are extremely demanding about price, quality, convenience, and service. This inherent complexity makes profit levels harder to come by than for a SaaS technology business, but in the complexity lies its defensiveness and the opportunity.

If someone had told me that since founding my firm 14 years ago, this sector would incur Brexit and the loss of European Union partnership and trade, the collapse of sterling, the ongoing erosion of liquidity in the UK stock market for small to mid-cap companies, a supply chain crisis or five, a cost-of-living and inflationary crisis, Covid tariffs, two wars, and two rounds of President Trump, even the optimist in me might have turned around and headed the other way. Over my 26 years in our industry, I haven't witnessed such a plethora of challenges, and to invest has been challenging and volatile, but the complexity makes it ever thus. And now we have Al...

So is the world overlooking an opportunity? With valuations at a 30% discount to long-run averages, free cash flow yields in the double digits, but capital and liquidity are scarce, opportunity is everywhere for the brave investor.

But what about Al? I believe that Al will be one of the great enablers for our industry over time. The agentic possibilities are staggering, but the beauty of the complexity of physical goods and services is that it is difficult to fully displace them. We have it firmly down as a sector that will greatly benefit from Al if you are alive and open to its possibilities.

Opportunity-wise, we are not focusing on the customer-facing agentic shopping trend via third-party LLMs as many others are. We see the agentic operating model as a great opportunity. We see far more efficient operating models coming on stream that deliver significant economic advantage, which in turn will allow the beneficiaries to put humans back into the front line to deliver great service.

It is service and the human touch that will deliver a competitive advantage. 'Human-led, enabled by technology' is how we frame it. The combination of depressed valuations, scarce capital and a sector firmly positioned as an Al beneficiary will surely awaken some investors' interest. We will always have the complexity. As a result, we will always have our fair share of failure, but in a world searching for opportunity, look no further than the entrepreneurs and managers of today's retail companies.

As Nathan Rothschild said in the 18th century, and as a brave investor might say in 2026: ‘The time to buy is when there's blood in the streets, even if the blood is your own.’

Matt Truman's latest Retail Week column is here, where he makes the case for why retail is one of the most overlooked investment opportunities in the market today.

Almost no one thinks about how to invest in retail

 has completed the strategic acquisition of 

, the Czech-based indoor cycling app that uses real-world video as the foundation of its training experience. 

The deal brings together two of the most recognised platforms in indoor cycling, with both companies set to continue operating independently, serving their respective communities with differentiated products and subscription offerings. 

Eric Min, Co-founder and CEO of Zwift, commented: 

The acquisition comes at a moment of strong momentum for the category. The indoor cycling market is growing at its fastest rate since COVID, driven by the increased affordability of smart trainers and a widening audience of first time cyclers through indoor training. 

Zwift Ready smart trainers and Zwift Ride smart frames will now be fully compatible with the Rouvy platform, unlocking new experiences for users and lowering the barrier to entry for newcomers to the sport. 

We look forward to supporting the team as they bring the joy of cycling to more people. 

Zwift has acquired Rouvy, the real-routes indoor cycling app, marking a significant step in the expansion of the global indoor cycling category. 

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