A tough year for women, a stock market roller coaster, and more money, IPOs, and unicorns
Happy New Year 2021 from In The Money 💜
Happy New Year 2021. Last year was tough, the loss and fear of it all. We were all there, so I won’t dwell on it more here. But the year also taught us that there are so many things to feel joy and gratefulness for. Myself, I’m grateful that even though stuck with WFH, I was able to connect and get to know amazing people from all over the globe. I’m proud of myself that I followed my passion and started this newsletter, which week after week brings me so much joy. Finally, I want to thank you all for reading this and being on this journey with me.
Last year was especially tough on women, and in this newsletter, we take a closer look at these struggles, some glimpse of hope for the coming year, and examine the rollercoaster of a year 2020 was for the stock markets.
Wishing you a happy, healthy, and prosperous New Year ahead 💜
41/500 👩💼
A record 41 female CEOs are soon going to be leading Fortune 500 companies. A new milestone that has largely been driven by the retail industry which also has the largest percentage of female board members, 32.8%. This comes after Lauren Hobart will take the reins as CEO at Dick’s Sporting Goods in early 2021.
According to recruiters, consumer-facing companies are coming to the realization that they need a leader who understands the consumer, and that most people driving purchase decisions in households are women.
Many retailers are facing upheaval as rapid e-commerce growth reshapes the industry. That has also presented an opportunity for some companies to shake things up and select a female CEO. The so-called glass cliff is not a new phenomenon. It refers to women being put into leadership roles during periods of crisis or downturn.
Research has over and over again shown that higher proportions of women in decision-making roles have a positive correlation to superior profitability, however, the proportion of women in managerial positions remains low in both the public and private sectors.
According to United Nations World’s Women 2020 data, globally, women held only 28% of managerial positions in 2019, with some regional variations, and in countries, in Northern Africa and Western Asia, and Central and Southern Asia, the proportion barely reached 13%. Numbers that have not changed significantly over the past 20 years.
The underrepresentation of women in management positions is even more visible at higher levels. 48% of companies in 2018 had at least one woman in senior management, but only 31% had women in top executive positions. Women CEOs are even more scarce. Only 18% of companies surveyed by the World Bank had a woman CEO.
A tough year for women in the workforce 👩💻
While some progress on leadership positions (there’s still so much work to do) has been made in 2020, the year, however, was remarked by women in the workforce suffering unprecedented losses - both disproportionate job loss and increasing caregiving responsibilities. A combination that could roll back much of the progress women have made over the past years and decades. According to McKinsey’s report Women in the Workplace 2020, one in four women are considering downshifting their careers or leaving the workforce entirely because of the impact of COVID-19.
Between August and September, more than 865,000 women dropped out of the workforce, compared to 216,000 men who left the workforce.
In interviews with Fortune six women, among them, Melinda Gates and Tina Tchen weighed in on the question if working women stand a chance of recovering in 2021.
“If we ignore these needs, it’ll deepen the recession and slow recovery for everyone. If we recognize that caregiving is infrastructure and invest in it accordingly, women may just save our economy.” – Melinda Gates
“I really do think that 2021 can be the year in which we make that kind of generational, transformational change.” – Tina Tchen, CEO of Time’s Up
Stock market roller coaster 🎢
2020 began with stocks closing at a record-high on February 19, after which they suffered a monthlong plummet as the coronavirus and lockdowns spread all over the globe. On March 12, there was a 9.5% plummet in the S&P 500, its biggest one-day percentage drop since the “Black Monday” crash of 1987. This confirmed a bear market (see definition section below).
The plummet lasted only until March 23, when the S&P bottomed. It then went on to surpass its February high on August 18, marking the start of a new bull market (see definition section below).
The S&P 500 is up more than 65% since the March low and finished the year with a gain of 16.26%. The top five performing stocks in the S&P 500 for 2020 were:
Tesla, 743.1% price return
Etsy, 301.6%
Nvidia, 121.9%
PayPal, 116.5%
L Brands, 105.5%
The climb of the S&P 500 would have been even bigger if the top two companies had started the year in the index. Both electric vehicle maker Tesla and e-commerce company Etsy were added to the S&P 500 during the final four months of 2020.
At the same time, the seven most valuable US tech companies: Apple, Microsoft, Amazon, Alphabet, Facebook, Tesla, and Nvidia picked up a combined $3.4 trillion in market cap in 2020. The tech-heavy Nasdaq registered its best annual since 2009, up 43.6%.
While across the pond in Europe numbers didn’t look as cheerful. The pan-European Stoxx 600 index is down 3.75% (however it is up almost 11% for the fourth quarter). Looking at individual indexes, London’s FTSE is down 14%, marking its worst year since 2008. The French CAC 40 down 7%, German DAX up 3.5%, and Italy’s FTSE MIB down 5.4%. The worst-performing market in Europe was Spain’s IBEX, down 15% in 2020.
Definitions
Bull Market 📈 is a condition in the market when prices are rising, most often referred to the stock market, but applies essentially to all securities. Because prices of securities continuously rise and fall, bull market is reserved for extended periods of rising prices. The market is characterized by investor optimism and confidence. The most common definition of a bull market is when the stock prices rise by 20%.
Bear Market 🐻 is essentially the opposite of a bull market. It is a condition when the market has experienced a prolonged decline in prices. The most common definition is when securities prices fall 20% or more from a recent high. The bear market is often caused by a weak or slowing economy; low employment, low disposable income; low productivity, and a drop in business profits.
European Tech saw more 💵, 🔔, and 🦄 in 2020
In a year that saw €37.9bn of VC funding raised, 21 IPOs, 15 new unicorns, 1,933 seed rounds, and 181 VC funds raised in Europe, Sifted took a closer look at the numbers. A few interesting points:
Fewer, but bigger funding rounds raised this year compared to 2019
Tech companies stopped recruiting when Covid first broke out, but in the second half of 2020, tech vacancies have rebounded
Sequoia-backed Klarna was Europe’s largest VC round of the year with $650 million in September
Sustainability is Trending ♻️
Assets in mutual funds and ETFs (exchange-traded funds) focused on sustainability hit $1.2 trillion globally in the third quarter of 2020. This is up 19% from the second quarter. New sustainability funds are also opened: 53 sustainable funds have been opened in the US this year, bringing the total number to 367. This increased demand comes as investor interest in environmental, social and governance issues is growing, partly because of Covid-19. ESG continues to gain market share. CEO of Trillium Asset Management, Matt Patsky states that “The performance is there, the risk mitigation is there, and the investment analysis is there.”
You can read the whole Morningstar Global Sustainable Fund Flows report here.
Woman of the Week
Brianne Kimmel
Brianne is an angel investor and the founder and managing partner of Worklife Ventures, an early-stage venture capital firm based in Silicon Valley. She has been named as one of the top angel investors by Business Insider.
After studying journalism and computer science in college, Brianne moved to Sydney, Australia, where she worked in product at Expedia. She also taught classes in General Assembly during the weekends. She later spun her classes into SaaS school, an invite-only program for entrepreneurs. Before starting Worklife, Brianne previously worked on the go-to-market team at Zendesk.
Her fund, Worklife focuses on investing in the future of work, that is in tools and services for people at work – a trend that Brianne had identified long before the pandemic. In a recent interview with Barron’s Brianne said, “The thesis for Worklife was to take these large, macro trends, which are allowing people to be their own bosses and if anything, the pandemic has accelerated those theories and pulled them into mainstream adoption.” She also describes how everything about Worklife represents what’s new. This includes the way she has gone about raising capital, looking outside of the traditional Silicon Valley folks, and instead focusing on the power of influencers, and celebrities, people with more to offer than simply financial resources. Investors such as Marc Andreessen, Alexis Ohanian, and entrepreneurs such as Eric Yuan, CEO of Zoom have invested in Worklife. Brianne is currently raising her second fund. Some of Worklife’s portfolio companies include Webflow, Tonal, and Haus.
If you want to learn more about Brianne, you can read and subscribe to her newsletter on tech and consumer culture here.
Thank you so much for reading this week’s newsletter. I’m looking forward to all the exciting things to come in the new year ahead. As usual, I would love to hear your feedback, and please share this with a few friends you think would find this interesting. I hope 2021 will be kind to you 💜