Citizen Capital invested in Beebs and here is why.

Beebs is a second-hand and social marketplace which helps parents provide for their children in a more economical, sustainable, and trusted way.

On Beebs, parents can buy and sell any kind of baby and child products: toys, books, clothes, strollers, furniture and more. Beebs is also a community where parents can share tips and discuss child-related topics. Beebs fosters its community by producing content on a large range of subjects such as the arrival of a newborn, money-saving baby gear, or eco-friendly toys.

The start-up is Paris-based and founded by two young fathers, Morgan Hilmi and Arsène Huot.

Early June, the team closed a 3M€ seed round with Citizen Capital, Isai and well-known business angels. We are thrilled to be part of the adventure.

Citizen Capital invests in companies on a social and/or environmental mission which are led by founders who think and build their business in alignment with their mission.

Citizen Capital analyzes opportunities by assessing Vanilla VC criteria through the lens of impact.

Investment principles are straightforward.

Market.

Is the company responding to a fundamental need? Is this fundamental need widely shared among the targeted population? Does the target population include under-served populations?

Product.

Is the product game-changing for people/companies using it? Can it be distributed to millions of people/companies?

Product/Market fit.

What is the proof of impact? Who are the users? How much value are the users gaining from it?

Team.

Are they on a mission to transform society? What are their drivers? Are they talented enough to meet their ambition? Are they willing to build a culture driven by the company’s mission ?

NB: the list above does not suggest a favored ranking — all aspects are assessed with the same level of attention.

Our investment principles are not exhaustive. In conjunction with a rational analysis, there is always a bet we are willing to take.

Here is the story of our investment in Beebs, analysis and bet all together.

Market.

Addressing fundamental needs.

85% of parents find it economically difficult to have a child.

Beebs provides parents from all social classes and statuses with best-in-class equipment for their children. The yearly spend in clothing and equipment is estimated between 600€ to 1000€ per child. Beebs allows parents to access products that are up to 80% cheaper in comparison with newly manufactured goods.

Potential.

The second-hand goods market has boomed in the past decade. In France alone, the market accounted for 7,4bn€ in 2020, of which 50% was captured by online marketplaces. A trend reinforced during the covid-19 pandemic and winning over X, Y and Z generations. In 2023, 27% of our wardrobes should be second hand. Back in 2018 only 16% of the population bought second-hand products.

In Europe, the second-hand baby and child product market alone has been estimated at 21bn€ in 2020 and should continue to grow by 15–20% per year in the next 5 years.

Drivers.

The sale and purchase of second-hand products have, until recently, mainly been economic and emotional. But societal changes have brought along new social and ecological drivers.

Social drivers: influence of social media and public, second-hand goods turning into a global fashion trend for people of different social statuses and classes, accumulation of social contacts and creation of benchmark groups and communities.

Ecological drivers: second life for newly manufactured products, reduction in the pollution of the environment and resource savings.

Competition.

The emergence of social and ecological drivers has been a major boost for existing second-hand marketplaces and platforms. Leboncoin (Adevinta) in France hit crazy records in 2020: 20 million visits per day and an annualized GMV representing 1% of France’s GDP. Pioneers like Craigslist, Ebay, OLX, Adevinta, Facebook Marketplaces and more recently Vinted, have benefited from the surge of the second-hand market.

These generalist platforms have a big share of the market in countries they are deployed in but are increasingly being challenged by vertical marketplaces. Vertical marketplaces offer more personalized user experiences and community-based approaches.

Our belief.

Vertical marketplaces will continue to grow alongside generalist platforms. Like Vestiaire Collective in France, which captured the “luxury fashion” vertical, we believe Beebs has a place to take on the baby and kids’ vertical.

Vestiaire Collective and Beebs have in common the choice of a “passion vertical” animated by users who are passionate about the products they buy and sell and are willing to discuss for hours over their product hunt. “Passion verticals” justify the need for adjacent communities. Fashionistas never get tired discussing ways to hunt down a vintage Dior bag. Likewise, we believe parents have inexhaustible resources when it comes to debating the gear, toys, books, clothes they should buy for their sweethearts. Buying for someone else than yourself usually requires some piece of advice which means engaging with other parents will always make sense.

Vestiaire Collective and Beebs don’t have in common the need they address: providing accessible luxury items for fashionistas vs. providing best-in-class equipment for parents of all social statuses and classes. Beebs responds to a fundamental need: enabling parents to provide for their children regardless of their revenues or social status.

Product.

Beebs users save money and reduce their environmental footprint. Soon they will be able to monitor their money savings and carbon emissions on the platform. Bringing traceability and transparency is game-changing within this market. Especially while offering an exhaustive and comprehensive supply covering parents’ needs end to end.

On the accessibility side, Beebs plans to ensure compatibility with all kinds of smartphones to ensure under-served populations with low value smartphones can access the app seamlessly.

Challenges. Maintaining accessibility as a guiding principle in product and go-to-market strategy. The ability to deliver a perfect marketplace experience and develop new on-demand services to increase, average order value, buyer retention and repeat rates.

The supply side should be less of a challenge, it is tremendous, but its curation will be. On verticalized marketplaces buyers will increasingly expect their discovery to be personalized and qualitative. To hit the target, execution will be crucial: the development of new services will need to be finely tuned to prevent unit economics from being sacrificed.

Product/Market fit.

Beebs’ figures less than a year after the launch of their marketplace, prove undeniable traction with 300,000 active users, 250,000 active listings and over 500,000 listings published since their launch. User cohorts also demonstrate promising retention and repeat rates.

The execution masters behind is an impressive duo.

Team.

Morgan has 9 years of experience in marketplaces at Iziwork, Uber Eats and Amazon and Arsène has 9 years of experience in mobile development at Frichti, Rimlink, Backelite.

My first call with Morgan was a no-brainer, he just nailed it. Structured, data-driven, ambitious, backed with the relevant marketplace experience and genuinely concerned by Beebs’ mission, being a young father himself.

I met Arsène later and acknowledged how complementary both of their profiles were. Arsène’s experience and personality were a great addition to Morgan’s skills. Arsène masters many technical and product related topics with the ability to steer cross-functional projects while executing and iterating fast on the product.

As great founders usually do not come alone, Morgan and Arsène were also surrounded by an amazing team of advisors, specialized in marketplaces.

All along the investment process communication was straightforward and expectations from all parties were managed amazingly well.

The vision carried by Morgan and Arsène echoes how impact-driven they are. Their will is to build a company driven by Beebs’ mission which they value as a strategic asset guiding their day-to-day product, marketing, sales and operations roadmap. Here is why we invested.

We are very confident that if one team can take over the baby and kids’ second-hand market it must be them.

Welcome on board Beebs, we can’t wait to write the next chapter together!

If you’re on a social and/or environmental mission and you’d like to discuss, don’t hesitate to reach out.

Via email, Twitter or LinkedIn as you wish.

Venture Capital Investor @ Citizen Capital 💙 femtech | tabootech 🕵🏼 Looking for entrepreneurs solving major social/environmental issues