Battery Ventures Gen Z Report

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U N D E R S T A N D I N G T H E N E X T G E N E R A T I O N O F C O N S U M E R S • A Gen Z Snapshot
Understanding
the Next Generation
of Consumers
A G E N Z S N A P S H O T
Roger Lee, General Partner
Courtney Chow, Vice President
Isabel von Stauffenberg, Associate
A U G U S T 2 0 2 3

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*Denotes a past or present Battery portfolio company. For a full list of all Battery Ventures investments, please visit: battery.com/list-of-all-companies. No assumptions
should be made that any investments identified within this report were or will be profitable. It should not be assumed that recommendations in the future will be profitable or
equal the performance of the identified companies.
This material is provided for informational purposes, and it is not, and may not be relied on in any manner as legal, tax or investment advice or as an offer to sell or a
solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity.
The information and data are as of the publication date unless otherwise noted. Content obtained from third-party sources, although believed to be reliable, has not been
independently verified as to its accuracy or completeness and cannot be guaranteed. Battery Ventures has no obligation to update, modify or amend the content of this post
nor notify its readers in the event that any information, opinion, projection, forecast or estimate included changes or subsequently becomes inaccurate. The information
within may contain projections or other forward-looking statements regarding future events or expectations. Predictions, opinions and other information discussed in this
report are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Battery Ventures assumes no duty to and does not
undertake to update forward-looking statements.
Roger Lee
General Partner • Menlo Park • Joined Battery in 2001
Focus Areas: Consumer
Roger is a former entrepreneur who invests in sectors including e-commerce, online gaming,
digital health, financial technology/blockchain and online education. He has a particular focus
on companies offering products and services through online marketplaces.
Courtney Chow
Investment Team • San Francisco • Joined Battery in 2019
Focus Areas: Consumer, Application Software
Courtney is a vice president who focuses on early- and growth-stage consumer internet,
software and fintech investments.
Isabel von Stauffenberg
Investment Team • New York City • Joined Battery in 2021
Focus Areas: Application Software, Consumer, Infrastructure Software
Isabel is an associate who focuses on early- and growth-stage companies across sectors and
focus areas within the firm.

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Last year, members of Generation Z, those born between
1997 and 2012, surpassed millennials as the most populous
generation on Earth, representing more than:
Gen Zers’ distinct buying patterns and outlooks are poised to reshape entire industries, from finance, health and
housing to entertainment and retail. As a result, we will likely see a mega consumer shift—one that will propel some
businesses to new heights and leave others behind. The impact of Gen Zers across industries will be on par with
how baby boomers reshaped the U.S. housing market in the 1980s and how digitally savvy millennials drove huge
transformations in e-commerce, entertainment and social connection in the 2000s.
of the global population
Source: U.S. Census Bureau
in purchasing power.
Source: Bloomberg
A W A L K D O W N M E M O R Y L A N E : M I L L E N N I A L S
S H I F T TO
M O B I L E
We saw an accelerated shift to
mobile content consumption
and overall device usage.
ACC E S S OV E R
O W N E R S H I P
The Sharing Economy 1.0 is born,
driven by millennials’ desire for
“experiences over things.”
2009
2010
C AT EG O RY L E A D E R S C AT EG O RY L E A D E R S C AT EG O RY L E A D E R S
2008
2006
S O C I A L &
CO N N EC T E D
Social media platforms to
connect with peers become
widely adopted.
2010
2009
2004

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Portrait of a Rising Generation
We believe that Gen Zers—who have never known a world without search engines, mobile devices and
social media—are poised to become one of the most-influential generations in history, with enormous
implications for consumer businesses.
W
H
O
I
S
G
E
N
Z
?
Gen Z refers to the generation born between 1997–2012,
which now makes up 25% of the global population.
Gen Z is the most-diverse generation in terms of race
and ethnicity. Only 52% of Gen Z identifies as White.
Gen Z is also the most-diverse generation in terms of sexuality.
16% of Gen Z identifies as part of the LGBTQ+ community, more
than any previous generation.
Gen Z is the most-educated generation yet. Gen Zers are more
likely to be enrolled in college between the ages of 18-21 than their
millennial or Gen X peers.
Gen Z lives online. Gen Zers spend ~10.6 hours online
every day and 33% believe that their online identity is their “most
authentic self.”
Source: U.S. Census Bureau
Source: Pew Research Center
Source: Collage Group
Source: Pew Research Center
Sources: Decision Lab, Vice News

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Core Values, Community
& Social Attitudes
Gen Z has grown up enduring nearly perpetual economic, social and political change and turmoil. Think of the 9/11 attacks, the
2008 financial crisis, the recent social-justice movements and, of course, the COVID-19 pandemic. These experiences have
shaped a unique outlook among Gen Zers, who now prefer to engage with businesses aligned with their values, seek out better
work-life balance and demand better access to healthcare and debt-repayment strategies. These events also caused some Gen Zers
to hold more pessimistic views on issues like homeownership; 34% of Gen Zers, for example, think their finances will never be in
good enough shape to buy a home.
At Battery, we believe it’s imperative for businesses of all stages to understand and anticipate the
unique desires and attributes of this generation—or risk fading into obscurity.
Sources: Freddie Mac, WGU
M A C R O
E N V I R O N M E N T
I M P A C T
O N G E N Z
B U S I N E S S
I M P L I C A T I O N S
Widespread Internet
Usage: 2000 & Onward
Gen Z is the first generation to grow up
with the Internet as a part of daily life.
Diversity of Gen Z
Gen Z is the most-diverse generation in
terms of race, gender and sexual orientation.
Climate Change
Gen Z has witnessed firsthand the effects
of climate change, including natural disasters,
rising sea levels and the like.
The Great Recession
Gen Z grew up watching parents and older
siblings lose jobs after the 2008 economic
crisis and its decade-long recovery.
COVID-19, Political Uncertainty,
& Social Media
Gen Zers face significant challenges as they
mature, compounded by social isolation from
peers during the pandemic.
Inherently Technological
As true “digital natives,” Gen Zers are
extremely active online, whether it be
working, shopping, dating or making friends.
Socially Conscious
Eager to make a positive impact on
society, Gen Zers are actively engaged
in social and environmental issues to
create meaningful change.
Purposeful Consumption
Gen Zers’ keen awareness of climate
change has driven more-sustainable
consumption habits.
Understanding of Economic
Hardship & Income Inequality
The Great Recession has had a profound
impact on Gen Zers’ relationship with work
and perspective toward future career growth.
Acute Mental Health Awareness
The vast majority (over 90%) of Gen Zers
say they have experienced a physical
or emotional symptom due to stress or
mental illness.
Truly Omnichannel
Gen Zers want to access their favorite
social hubs, sites, retailers, games and
media anytime, anywhere.
Individuality & Diversity
Gen Zers celebrate individuality and
embrace diversity in all its forms. They
appreciate authenticity and inclusivity and
expect brands to reflect these values.
Commitment to Sustainability
Gen Zers encourage recycling, second-hand
purchases and leading a climate-neutral
lifestyle. They also expect businesses to take
responsibility and do their part.
Entrepreneurial Spirit
Gen Zers are more likely than their
millennial counterparts to have side jobs
or to work entirely freelance.
Mental Health Advocacy
Gen Zers strongly believe that mental
health is healthcare and that access
to mental health care should be an
employer-sponsored benefit.

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Keeping it Real: Gen Z & Entertainment
In line with their core identity and value systems, and as online content
becomes more diverse and accessible, Gen Zers seek out community,
connectivity and authenticity online.
THE RISE OF VERTICAL NETWORKS & HYPER-SPECIFIC COMMUNITIES:
We are seeing social trends shift away from “main feeds” toward more private, alternative
channels, such as subreddits and Facebook Groups. At Battery, we are particularly interested
in networks that allow users to share unique and exclusive content, fulfill needs and function
as a key “system of record” or “identity” inside a certain vertical/use case.
VIDEO SHARING IS THE NEXT BASTION OF SOCIAL NETWORKING
Video consumption is surging online. Consumers increasingly expect high-quality, engaging
content across platforms and different use cases, including entertainment, news, community
and business. We believe there is an opportunity to leverage automation, AI and immersive
technologies to elevate the production value and creative potential of video content and also
address existing challenges, such as scalability, collaboration and cost.
V E R T I C A L C O M M U N I T I E S V I D E O - F I R S T I N F R A S T R U C T U R E
Video-Editing Software
Live-Shopping Tools
of 18–25-year-olds say
there’s no such thing as
“mainstream” pop culture.
Source: Horizon Media
of Gen Zers
watch content that none
of their friends watch.
Source: The Leap
Vertical Communities Infrastructure
Vertical Networks
T O P
T I K T O K E R S
J A N U A R Y 2 0 2 3
Source: BrandWatch
of Gen Zers use
YouTube weekly.
of Gen Zers use
TikTok weekly.
Source: Measure Protocol

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From Hashtags to Handbags:
Gen Z & Retail
Representing $360 billion in global purchasing power, Gen Z is a powerful
retail force. But the ways by which Gen Zers find and purchase goods are
fundamentally different from other generations.
THE CONVERGENCE OF SOCIAL & COMMERCE: Today, social media is fast becoming
home to the entire consumer experience. Social is the de-facto place to search, discover and
become inspired, especially for Gen Zers. As a result, social platforms like Instagram, TikTok,
YouTube and more are critical nodes in the consumer-purchasing journey. This change comes
as brands have lost visibility into consumer data and can no longer track and retarget users as
effectively, due to iOS14 updates and the depreciation of third-party cookies on Google. These
dynamics have driven customer-acquisition costs (CAC) to all-time highs, while conversion rates
on e-commerce platforms have fallen to all-time lows.
Grew by >50% Grew by 30–50% Grew by 15–30% Grew by 0–15% Declined
7%
15%
25%
39%
14%
Source: CommerceNext
R E T A I L E R S ’
C U S T O M E R
A C Q U I S I T I O N
C O S T S
P O S T - I O S 1 4
In turn, brands are motivated to reallocate their budgets to social-commerce strategies in hopes
of building long-term relationships with their end consumers, monetizing off this community and,
ultimately, owning the data directly. We are fascinated by this paradigm shift in how consumers
interact with brands—where, when and how they shop—and excited by the infrastructure and
software that support this retail transformation.
SOCIAL MEDIA REIGNS SUPREME FOR SHOPPERS: Gen Z consumers tend to find
brands on Instagram and TikTok, where authenticity is key: 97% of Gen Z shoppers use social media
for shopping ideas, while the hashtag #tiktokmademebuyit has upwards of 60B views on TikTok.
#TikTokMadeMeBuyIt
Source:
TikTok for
Business
C O N S U M E R -
F O C U S E D
S O C I A L
M E D I A
C O N T E N T
Source: YouTube

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P R E F E R T O
B U Y F R O M
S U S T A I N A B L E
B R A N D S
DOUBLING DOWN ON THE CIRCULAR ECONOMY: We are excited by the potential in
“re-commerce” startups: the marketplaces, infrastructure and enabling software tools that allow
consumers and businesses to buy, sell or rent secondhand goods.
We have closely tracked Gen Zers’ profound emphasis on ethical
consumerism and sustainability, which is influencing the perspectives of
other generations, too.
SOCIAL-NATIVE BRAND INFRASTRUCTURE
Social-Native e-Commerce
Influencer-Referral Tooling
C I R C U L A R E C O N O MY T O O L S
Circular Economy Marketplaces
Circular Economy Infrastructure
Source: WEF report
2021 2019
Baby Boomers Generation X Millennials
45%
39%
67%
54%
67%
62%
Gen Zers Are Conscientious Consumers
of Gen Z consumers try to
purchase from companies
they consider ethical.
Source: McKinsey
of Gen Z believe
companies must take
action on social and
environmental issues.
Source: Sustainable Brands
GENERATION
G R E E N
Source: YouTube
Source: TikTok

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Lessons Learned, Money Earned:
Gen Z & Finances
After witnessing parents and older siblings navigate financial crises,
Gen Zers have likely developed a heightened awareness of financial security.
They appear debt-averse, stressed about finances and determined to manage
money differently from other generations.
DRIVE FOR FINANCIAL FREEDOM: Gen Zers are driving notable shifts in the fintech
industry, shaped by three key patterns: a reluctance to assume credit-card debt; an expectation
that brands align with their values; and a desire for community-oriented financial services that
make investing an enjoyable activity.
We recognize the need for automated savings plans, credit-building solutions, long-term wealth-
building guidance and investment platforms with low-cost options and personalized advice.
Moreover, we anticipate the growing importance of alternative benefits, such as employee debt
repayment and modern 401k retirement tools, which will streamline debt repayments and savings
and also offer user-friendly interfaces, in line with consumer preferences.
of Gen Zers are
already achieving prime or
above-prime credit scores.
Source: CNBC
of Gen Zers anticipate
student-debt repayment burdens
upon entering the workforce.
Source: HandShake
F I N A N C I A L T O O L S
Credit Building
Investing/Saving
B E N E F I T S I N F R A S T R U C T U R E
Debt Repayment
Modern 401Ks / Retirement
of Gen Zers consider
themselves big spenders.
Source: Apogee
of Gen Zers prioritize
saving over spending.
Source: Apogee
of Gen Zers would
feel less stressed if
work offered financial-
wellness benefits.
Source: Statista
is the ideal retirement
age for Gen Zers,
though most expect
to retire by 60.
Source: Oliver Wyman
14% 💳
48% 🏦
61% 📚
54 ⏰
G E N Z
F A C T S H E E T

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“I’m a Business, Man —
—
Not a Businessman”: Gen Z & Work
As they begin to enter the workforce, Gen Zers are increasingly drawn to
non-traditional ways of working that suit their desired lifestyles better than
a traditional 9-5 job.
More than any other generation, Gen Zers are seeking work they’re passionate about that also
affords them freedom and flexibility.
THE SOLOPRENEUR OS: Gen Zers appear to seek independence in their professional lives,
valuing flexibility, control and creative expression. However, the journey to self-employment
can be daunting, historically characterized by high risks and unexpected costs. Therefore, we are
excited by emerging software and marketplaces designed to assist individuals in launching, selling,
managing and expanding their businesses.
These innovative solutions alleviate the operational burdens and complexities faced by
entrepreneurs and freelancers, empowering independent workers to succeed.
of Gen Zers
participate in freelance work.
Source: Statista
of Gen Zers indicate they
have started, or intend to start,
their own business.
Source: Microsoft
F R E E L A N C E R P L A T F O R M S
Marketplaces
Operating Systems
F R E E L A N C E R I N F R A S T R U C T U R E
Financial Tools
more likely for Gen
Zers than members
of other generations
to want the ability to
mentor others.
Source: GWI
of Gen Zers have a
full-time or part-time
job in addition to their
main one.
Source: CNBC
of Gen Zers are
protective of a
work-life boundary.
Source: GWI
of Gen Zers prefer
hybrid or remote work.
37% 💼
46% 🎨
72% 🌴
85% 🏡
G E N Z
F A C T S H E E T

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A Swipe Away From Home Sweet
Home: Gen Z & Real Estate
DIGITAL MORTGAGES ARE GAME CHANGERS: Gen Zers' digital upbringing has
influenced their approach to browsing, searching for and purchasing homes, especially as first-
time buyers. Consequently, at Battery, we are excited by the emergence of platforms that enable
streamlined and digital-first home buying experiences. Tools such as digital mortgage-origination
platforms automate and simplify the mortgage application and approval process, offering Gen Z
homebuyers a more efficient and convenient experience.
We are also interested in mortgage-servicing tools that provide homeowners with real-time
access to their mortgage information, personalized financial advice and tailored payment options,
enhancing the overall homeownership journey. It is important to note, however, that many Gen
Zers are pessimistic about their home-buying prospects. 34% of Gen Zers believe that buying a
home will always be out of their reach for financial reasons, according to Freddie Mac.
GENERATION RENT 2.0: We believe there is significant opportunity to empower
aspiring homeowners and reshape the rental business model. Rent-to-own models provide
a flexible and accessible path to homeownership, particularly for those who may not meet
traditional lenders’ strict credit and income criteria. New companies are developing innovative,
tech-based approaches to the rental experience that will create a more balanced and sustainable
approach to housing.
D I G I T A L M O R T G A G I N G & S E R V I C E S
Mortgaging Origination
Digital Servicing
I N N OVAT I O N TO O W N E R S H I P O R R E N TA L
“Rent-to-Own” Models
Rent 2.0
of Gen Z homebuyers
would consider an app or online
service to make their purchase.
Source: Homie
of millennials
say the same.
Source: Homie
While it’s too early to see real impacts in the home-purchasing category,
it’s likely that Gen Zers behaviors here will be dictated by their digital-first
nature, fiscal prudence and attention to value.
Still early in their home-buying journeys, Gen Zers are already leaning toward digital options for
their core purchasing channels, even more so than digitally native millennials.
H O M E
B U Y I N G
M O V E S
O N L I N E
Source: TikTok

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Mental Health Access
Gen Zers are highly health-conscious, with a keen awareness of
mental-health issues and a focus on tracking fitness with wearables and
other technologies.
SMASHING THE STIGMA OF MENTAL HEALTH: In the wake of the global pandemic,
many Gen Zers are conscious of its mental toll, reporting higher rates of anxiety, depression
and distress than any other generation. We are committed to democratizing access to essential
tools like accessible mental-healthcare platforms that are augmented by data and insights, as
demonstrated by our investment in Modern Health.* We continue to be excited by platforms that
give control and choice back to the consumer.
FOOD AS MEDICINE: Gen Zers are also conscious about what they eat, recognizing the
importance of healthy eating and its impact on overall wellbeing and on the environment.
As such, we are closely monitoring the rise of “food-as-medicine” platforms—which combine
culinary expertise, medical coverage and clinical care—to help consumers take control of their
health through nutritional insights, alternative diets and sustainable food practices.
of Gen Zers say they see healthy food as an
integral part of their physical and mental health.
Source: Food Navigator
of Gen Zers reported in 2021 that their mental
health had worsened during the pandemic.
Source: American Psychological Association
M E N TA L & P H Y S I C A L H E A LT H A C C E S S
Wearables & Health Data
H E A LT H Y F O O D & D I E TA R Y T R A C K I N G
Nutritional Guides & Services
“Virtual-Dining” Concepts
The Body (and the Mind) is a Temple:
Gen Z & Wellness
G E N Z
F A C T S H E E T
of Gen Zers report
having received
treatment from
a mental-health
professional.
Source: American Psychological
Association
of Gen Zers turn
to social media for
health information.
of Gen Zers go
meatless at least once
a week.
Source: Supermarket News
of Gen Zers wear
a smartwatch or
fitness tracker.
Source: ValuePenguin
37% 💬
42% 😷
79% 🥗
70% ⌚
*Denotes a Battery portfolio company. For a full list of all Battery investments, please visit: battery.com/list-of-all-companies
*
*

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Equipped with inherent digital savvy, Gen Zers are quick to adopt new
tools, methods of payment and more, including generative-AI applications
like ChatGPT.
Digital Tools for the Digitally Native
Generation: Gen Z & AI
Generative AI will have profound impacts on how consumers interact with the online world,
whether it be working, shopping, socializing and more.
THE FUTURE OF AN AI-DRIVEN WEB: We are only just beginning to see the effects of
generative AI. But already, Gen Zers have been adopting tools such as ChatGPT. At Battery, we
are extremely enthusiastic about this trend and have been closely monitoring consumer adoption
across different verticals.
Some examples include: search and product discovery, providing curated or more-accurate
product recommendations based on consumer behaviors; education, providing adaptive learning
environments and low-touch yet highly effective experiences; and gaming, providing hyper-
realistic and unpredictable game environments. With the transformative power of AI, we are
witnessing the emergence of novel use cases that were previously unimaginable.
C O N S U M E R A P P L I C A T I O N S O F G E N E R A T I V E A I
Search & Discovery
Education & Research
Gaming
of Gen Z report
using AI in the workplace today,
more than any other generation.
Source: Statista
of Gen Z
will be monthly generative-AI
users by 2025.
Source: Insider Intelligence
Source: TikTok

14
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Within our team and firm, we recognize the importance of staying attuned to the nuances of the next
generation. We strive to continually learn and stay informed about Gen Z consumers’ evolving perspectives,
values and behaviors, ensuring that our strategies and approaches remain relevant and effective. We
welcome any insights or opportunities to collaborate with those who share our vision and are building
companies aligned with our understanding of Gen Zers’ impact. We believe that collaboration and open
dialogue are key to harnessing the full potential and meeting the needs of this influential generation.
As Gen Zers continue to mature and enter different life stages, it will be interesting to observe how their
values, preferences and behaviors evolve over time. How will their consumer habits, career choices and
societal impact develop as they transition into adulthood?
Gen Zers face unique economic challenges, including student loan debt and an evolving job market. It
remains to be seen how these factors will shape members’ long-term economic prospects and financial
decisions. How will Gen Zers navigate the changing landscape of work and economic opportunities?
As Gen Zers enter the workforce, it will be important to observe how their expectations and values
influence workplace dynamics. How will they shape workplace culture, employee well-being initiatives
and the balance between work and personal life?
With Gen Zers’ heavy reliance on technology and their high exposure to digital platforms, it remains to
be seen how members’ mental health and well-being will be impacted in the long run. How will their
relationship with technology evolve and what steps can be taken to promote healthy digital habits and
mitigate potential negative effects?
As members of Gen Z continue to grow and define their identities, it will be valuable to understand
how they navigate cultural and social influences. How will they shape and redefine notions of identity,
belonging and community as they interact with a rapidly changing world?
Gen Zers’ behavior and beliefs hold immense influence, both realized and potential,
across industries. It is crucial that today’s business leaders understand and adapt to these
consumers’ preferences and needs.
And as Gen Zers make their mark, there are still aspects to this generation’s potential yet to be fully understood
or explored:
Long-Term
Behavior
Workplace
Dynamics
Technology &
Mental Health
Cultural &
Social Identity
Economic
Impact

15
V E R T I C A L C O M M U N I T I E S
F I N A N C I A L T O O L S
D I G I T A L M O R T G A G I N G & S E R V I C E S
C O N S U M E R A P P L I C A T I O N S O F G E N E R A T I V E A I
F R E E L A N C E R P L A T F O R M S
S O C I A L - N A T I V E B R A N D I N F R A S T R U C T U R E
M E N T A L & P H Y S I C A L H E A L T H A C C E S S
V I D E O - F I R S T I N F R A S T R U C T U R E
B E N E F I T S I N F R A S T R U C T U R E
I N N O VA T I O N T O O W N E R S H I P O R R E N T A L
F R E E L A N C E R I N F R A S T R U C T U R E
C I R C U L A R E C O N O M Y T O O L S
H E A L T H Y F O O D & D I E T A R Y T R A C K I N G
Vertical Communities Infrastructure
Investing/Saving
Digital Servicing
Education & Research
Operating Systems
Influencer-Referral Tooling
Wearables & Health Data
Live-Shopping Tools
Modern 401Ks/Retirement
Circular Economy Infrastructure
“Virtual-Dining” Concepts
Rent 2.0
Vertical Networks
Credit Building
Mortgaging Origination
Search & Discovery
Marketplaces
Social-Native e-Commerce
Mental Health Access
Video-Editing Software
Debt Repayment
“Rent-to-Own” Models
Gaming
Financial Tools
Circular Economy Marketplaces
Nutritional Guides & Services
Emerging Gen Z Consumer Technologies
*
*

Battery Ventures Gen Z Report

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