European VC firm Atomico announced this week that it has hired Sasha Astafyeva as a new investment partner.
Astafyeva previously spent three years as a principal at Felix Capital. In her new role, she’ll lead “sourcing, due diligence, and management” of consumer tech companies, according to a company statement.
Originally from Ukraine, Astafyeva was previously head of business intelligence and strategy at Lyst, a London-based online fashion marketplace. She has also worked at online real estate marketplace VivaReal as the company’s VP of finance and business intelligence and did a stint at Dafiti, a Latin American online fashion company.
We caught up with Astafyeva for a conversation that spanned the coronavirus crisis’ impact on her area of interest, new trends during and potentially after lockdown and how it feels to be a consumer-focused investor in turbulent times.
TechCrunch: Congratulations on joining Atomico as a partner. However, isn’t this a terrible time to be a consumer-focused VC, given that we are facing the worst downturn in many of our lifetimes?
Sasha Astafyeva: Thank you for the congratulations, first of all! I’m very excited to join the team and help lead our consumer-focused efforts. It is absolutely an interesting time to join as we find ourselves in a world with highly elevated levels of uncertainty, tremendous economic hardships across the world and varying, and often fast-changing, responses of countries to this new reality. I think that we are only seeing the beginning of this and time will tell what our new reality will look like.
However, I would respectfully challenge the idea that it’s a terrible time to be a consumer-focused investor today. There are sectors of the consumer space that have been resilient and have even thrived, in the current environment, and speaking in a more macro way, I do think that there will be a trickle-down impact to other sectors of the economy beyond consumer as we continue to see the full effects of the current crisis. The task becomes for all of us, not only consumer investors but investors in general, to think about long-term impacts of the current situation we find ourselves in and adjust accordingly.
Related to this, what consumer tech sectors do you think are the least resilient to the current consumer spending and funding landscape, and how should founders in these sectors be rethinking their plans and/or positioning their companies to survive and then hopefully prosper coming out of the pandemic?
This is a great question, as things will definitely continue to change as countries adjust their responses to the crisis. However, at the moment, undoubtedly, the sectors that rely the most on consumers spending time outside are the hardest-hit, which includes sectors such as travel, physical retail (particularly non-grocery spend), mobility, restaurants, physical entertainment, health and beauty and proptech.
If you are a founder of an existing business in these spaces, it is an extremely trying time filled with a lot of uncertainty, and I would say that really the first course of action is obviously trying to adapt and see if there are ways to recoup some of the lost revenue by pivoting from physical delivery of goods and services to digital delivery. And, of course, that’s often quite hard to do.
The second course of action is extending runway as much as possible. Many founders will have to make tough calls and this is also hopefully where they have a supportive group of investors around them who can help them make these tough decisions.
Conversely, where do you think the new opportunities lie, especially given that consumer digital tech appears to be accelerating amongst some demographics that have otherwise been slower to adopt tools that we in the tech industry have been using for years?
Another great question! Some of the sectors that we see weathering this crisis better than others include digital communication tools, digital entertainment, especially gaming and streaming services, digital health and fitness, e-commerce, grocery delivery and digital mental health. Historically we were already on the path where a lot of our spend was moving into the digital space, but this crisis really accelerated this trend and as you said, increased the addressable market as well. Startups operating in these sectors have great opportunities to capture market share and they will have to work hard to retain it as well as, depending on how long the crisis will last and how permanent our behavioural changes become, consumer expectations for these sectors will rise and companies will need to keep up.
Some folk have been saying that after this pandemic is under control, life will never be the same (i.e. this is the new normal, with people more likely to work from home, travel less, stay connected to friends and loved ones in new ways, the blurring of work and home life, adopting new forms of digital entertainment, etc.), while others are expecting and planning for a return to the status quo. Do you have any insights into life after the coronavirus crisis and what effect this will have on consumer trends?
I’m spending a lot of time thinking about this, as this will have implications for how we think about investment frameworks going forward. Historically, of course, an investor’s role involves both predicting the future and also investing in companies that contribute to the creation of a better world and a more positive future. It’s a fine dance. And what we are seeing now is that predicting the future is harder than ever. I believe that the world after coronavirus will depend a lot on how long our current status quo continues and on what kind of exit we will eventually find out of this situation. At the moment I would say that all of us are developing new habits and the longer we practice them, the more likely they are to become a new normal. In the absence of a vaccine, I would also think that we will continue to be cautious and continue moving many of our activities into the digital realm. Businesses that understand that and that build with that in mind will continue to benefit going forward, in my view.
If you were a potential founder or team that has been furloughed or perhaps made redundant and has time to kill (or “build”), how would you think about the immediate road ahead and any new opportunities that are opening up in the consumer space?
This is a very relevant question that many founders are asking. Given what we are seeing with the greater move toward digital, I think the categories we mentioned above will continue to be relevant. Digital health, fitness, communication and collaboration, digital entertainment, e-commerce and online food delivery. Of course, many of these consumer needs are already served by existing businesses, but many of these businesses are struggling to meet increased demand, and this is a great opportunity for new brands to emerge. As we are also spending a lot more time in our homes and so are our kids, two sectors that have not seen as much digital disruption in the past — and that’s of course edtech and home improvement space — might see more of that. In the non-digital space, as we look at consumer products, there is an opportunity also for new brands to emerge that will capitalize on our newly increased focus on personal hygiene and personal health.
Finally, thinking about the mental health toll of the current situation, this is also an interesting time to think about whether the current tools and services serve the needs of all parts of the population and if there are gaps that can be addressed through new offerings.
In general, I think this is an interesting opportunity for founders to extend our previous understanding of who the current digital offering serves and what it was used for, and think of it as a new normal for the majority of the population. The question then becomes — does it serve everyone well? And if the answer is no, it’s an interesting time to see how we can do things better.
What is the best tech pivot you have seen so far during lockdown?
We have seen so much resilience during the current crisis and many businesses are doing an amazing job trying to adapt to the current reality. Just to name a few, I find it so inspiring to see how businesses such as dating sites, fitness studios and restaurants have adapted to the new digital world by focusing on virtual dating, online fitness classes and online deliveries, respectively.
Product businesses such as fashion brands and CPG companies have pivoted to producing protective gear and hand sanitizer. Travel and entertainment businesses have focused on online experiences and bringing people together digitally. All of these pivots have been inspiring to watch as they show founders’ creativity and resilience, two characteristics that have been so important in the current crisis we are living through.
Two interesting examples I’ve noted from the Atomico portfolio would be Gympass and AccuRx. Gympass swiftly pivoted temporarily from offering the widest range of physical gym access for employees globally as a benefit (from their employers) to an online fitness discovery platform. And, while less a pivot and more a response to meet the urgent needs of front-line NHS workers, AccuRx built a video consultation product over the course of a weekend for GPs that doesn’t require patients to download a third-party app.
They launched it on March 8th and it is now being used by 90% of U.K. GP practices and in around 40 hospitals and counting for pre-COVID-19 screening, averaging 35,000 consultations per day, to keep our front-line healthcare staff safe. What’s most impressive about that is AccuRx is relatively small compared to established players in the telehealth space, with no marketing or sales function, but that growth has all been driven by word-of-mouth by NHS workers themselves, proving that the NHS can adopt technology rapidly if it has been built specifically for them with the needs of front-line workers in mind.
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