A celebration of the youngest female founder to take her company public
Welcome to edition Nº 11 of In The Money, your weekly newsletter on keeping up with the financial markets. Last week we got fantastic news of women investors raising funds to invest in female founders, and this week started off in a similar fashion. We also ended on a high note with Bumble’s IPO, Whitney Wolfe Herd became the youngest female founder to take her company public. Seeing her ring the opening bell with her baby in her arms definitely serves as inspiration for women everywhere. You can read and learn more about Wolfe Herd, who is the Woman of the Week. In other news, we saw cryptocurrencies reaching all-time highs, audio-first social platform gaining popularity, and Rihanna fundraising. I hope you enjoy this week’s edition.
Female founders received just 2.2% of venture capital in 2020 👩💻
When the pandemic struck, Sequoia predicted that this was the Black Swan event that would result in drops in business activity, and affect fundraising activities. These pauses turned out to be short-lived. For much of the tech industry, the pandemic provided an unexpected boom as consumers and businesses flocked to work-from-home technology, delivery platforms, among other things. Startups as a whole raised 13% more in venture capital in 2020 compared to 2019, an annual total of $150 billion. However, female founders’ share of the pie shrank to 2.2%.
Some of the biggest deals for female-led companies in 2020 went to Everly Well, Gro Intelligence, and Rent The Runway. Sara Menker's $80 million raise for Gro Intelligence is one of the largest ever for a Black woman CEO. In the interview with FortunePam Kostka CEO of AllRaise blames the "known founder effect." That is, when times get tough, VCs stuck with what, and who they already know.
Diversify boards 🎯
Speaking of AllRaise, the nonprofit on a mission to accelerate the success of female founders and funders. The organization started in 2017 when 34 senior female investors had the vision to make tech more accessible, equitable, and diverse.
In a memo released earlier this week, AllRaise announced its new initiative, Board Xcelerate that is out to tackle the problem of lack of board diversity with a new approach. By tapping into AllRaise’s vast community of influential leaders in tech and VC, we are providing a way for high-growth tech companies to get on board with diversity at the highest level.
All Raise is accelerating the change that needs to happen at the very top. They start by talking with investors, talent partners, and CEOs who want to fill their open independent board seats. Then, with a fast, 90-day closed search process through a pool of talent sourced from our own network and an external advisory committee, supported and executed by a retained executive search firm. To finally connect the companies and candidates to interview and determine the best fit.
“Independent board directors are incredible assets and mentors for CEOs, helping them to see around corners, set company strategy, and accelerate growth. Unfortunately, corporate board seats, like all the other powerful positions in this country, are dominated by white men. In 2020, people from underrepresented ethnic and racial groups made up only 12.5% of board directors, and women represented just 21% (Institutional Shareholder Services). Black directors made up 4% of boards and Black women just 1.5%.”
These statistics go against research that over and over again shows that diverse boards drive more successful business outcomes, decreasing a company’s risks while increasing innovation, efficiency, and other key performance metrics.
New fund alert 📣
Last week, we got numerous updates on female investors raising their funds, and this week, continuing where we left off, we got another piece of fantastic news. Former Partner at NEA, Dayna Grayson, and Uber executive, Rachel Holt announced that they had raised $140 million for their new firm, Construct Capital, to invest in companies in manufacturing, supply chain, transportation, and other foundational industries.
At NEA, Grayson led investments in 3D printing firm Desktop Metal, which recently went public and now trades at a market capitalization of $6 billion; design firm OnShape, since acquired by PTC for nearly $500 million, and other leaders in the sector. Grayson has a bachelor’s in engineering from the University of Virginia and an MBA from Harvard Business School. She joined NEA after working at North Bridge Venture Partners. Holt is a psychology major at Amherst and got her MBA at Stanford before joining Uber as its Washington, D.C. city general manager. Holt rose through the ranks at Uber to eventually run all of its US and Canada operations before switching over to its mobility unit that unit included Uber’s internal incubator and its bikes, scooters, and public transit projects.
Construct Capital’s founders met six years ago and started bandying about investing ideas, especially in 3D printing and transportation. About a year after striking out on their own, they told Forbes that they had finished raising funds from a variety of institutional investors, family office, and university endowments that they declined to name. In addition, Midas List venture capitalists Aileen Lee of Cowboy Ventures, Josh Kopelman of First Round, and Scott Sandell of NEA have made personal investments in the new fund. With the fund, they expect to create a concentrated portfolio of early-stage companies, both seed, and Series A, with check sizes ranging from $2 million to $7 million.
I firmly believe that as we see more women raising funds and being in positions of making investment decisions, we will also see the devastating statistics of female entrepreneurs raising just 2% of venture capital change.
From founder to funder 🤩
In 2009, Jennifer “Jenny” Fleiss decided to leave Walmart, where she’d led the now-shuttered clothing membership service Jetblack, to cofound Rent the Runway, the designer clothing rental company together with Jennifer Hyman.
Just weeks into the business, the two founders got crucial help from investor Scott Friend, a Bain Capital Ventures partner. Friend is a former founder himself and had been through it all before. In an interview with Forbes, Fleiss tells that “He deserves the title of cofounder as far as I’m concerned. He really understood what it was to be in our shoes. It seeped into the woodwork day to day how he was able to relate to us and it made a world of difference.”
Now Fleiss is looking to bring similar experiences and help to the next generation of founders. After toying with the idea of launching her own fund, Fleiss made the decision to join a Boston-based growth equity firm, Volition Capital, as its first female investment partner.
Bumble’s first date with the public markets 🔔
A couple of weeks back we took a deep dive into Bumble’s S-1 filing. On Thursday shares of the dating company began trading under the ticker BMBL, after having priced its IPO at $43 per share the day before. Bumble shares surged at the start of trading, up nearly 77% at $76 per share. The surge valued the company at $13 billion. The shares closed the day up 63.5% at $70.31.
At 31, Wolfe Herd is the youngest female founder to take a US company public. She also joins the ranks of an extremely small list of women founders who led IPOs, including Stitch Fix’s Katrina Lake, who took her company public in 2017, and Julia Wainwright, who took The RealReal public in 2019. While ringing the opening bell, Wolfe commented:
"I want to thank the remarkable women who paved the way for Bumble in the public markets."
According to Bloomberg, only two of the 559 companies that have gone public in the US in the past year were founded by women.
You can read and learn more about Bumble’s founder and CEO, Whitney Wolfe Herd below as she is the Woman of the Week.
Bitcoin hits all-time high (ATH) 🚀
On Monday, Tesla announced that it had bought $1.5 billion worth of Bitcoin. In a filing with the Securities and Exchange Commission (SEC), the company stated that it purchased Bitcoin for “more flexibility to further diversify and maximize returns on our cash.” Tesla also said it will start accepting payments for its products in Bitcoin, “subject to applicable laws and initially on a limited basis.” This would make Tesla the first major automaker to do so. The $1.5 billion worth of bitcoin will give Tesla liquidity in the cryptocurrency once it starts accepting it for payments.
According to the company’s most recent filing, it had more than $19 billion in cash and cash equivalents on hand at the end of 2020. Thus, the purchase of bitcoin represents an investment of a significant percentage of its cash.
The move comes after CEO Elon Musk’s recent behavior on Twitter, where he has been credited for increasing the prices of cryptocurrencies like Bitcoin and Dogecoin by posting positive tweets that have encouraged more people to buy the digital currencies. Two weeks ago, Elon Musk added the hashtag #bitcoin to his Twitter bio - a move that briefly pushed up the price of the cryptocurrency as much as 20%. Two days later, he said on the social audio app Clubhouse: “I do at this point think Bitcoin is a good thing, and I am a supporter of bitcoin.”
After the Tesla announcement, Bitcoin’s price jumped sharply to an all-time high. The world’s largest cryptocurrency popped 20.33% to $46,081.64, for its best day since March. At one point it hit a record high of $47,458. Bitcoin’s price more than quadrupled in 2020. Early on Thursday Bitcoin hit another all-time high of $48,297. The cryptocurrency is up more than 60% since the start of the year.
Crypto pioneer joins startup as CEO 👩💼
Cryptocurrency pioneer and early Bitcoin thought-leader Diana Biggs joined Swiss-based startup Valour as CEO. Valour lets investors buy digital assets through their bank or broker. The move is significant with the news that Tesla has bought $1.5 billion worth of Bitcoin (see above). This has massively boosted the mainstream markets for crypto assets.
Through her venture Proof of Purpose, Biggs has explored the potential for blockchain technology to help solve humanitarian challenges. Also, her TEDx speech on Blockchain Technology is considered by many in the blockchain space as one of the best. Biggs has been in the Bitcoin space since 2013 and commented to TechCrunch: “I have never seen this much attention to Bitcoin and other crypto-assets… The time for decentralized technologies has arrived, and their potential is increasingly realized by institutional investors.”
Biggs is an Associate Fellow at the University of Oxford’s Saïd Business School and previously served as Head Tutor for their Blockchain Strategy Programme. She is on the Board of the World Economic Forum’s Digital Leaders of Europe community. Prior to joining Valour, Biggs was Global Head of Innovation for HSBC Private Banking, where she led on fintech partnerships and driving open innovation.
Who let the Doge out 🐕
In last week’s newsletter, we saw that Elon Musk had been tweeting about Dogecoin. After Musk and other celebrities were tweeting about it during the weekend, Dogecoin reached a record. The meme-inspired crypto rallied 37% in 24 hours to a record high of $0.084945 on Monday. Dogecoin’s run has boosted its market value to over $10 billion, making it the number 10 digital coin on CoinMarketCap’s ranking.
Dogecoin was created in 2013 and is based on the then-popular “doge” meme that portrays a shiba inu dog. The cryptocurrency was initially started as a joke but has gained a following.
In a session on the social audio app Clubhouse earlier Musk commented “But fate loves irony. The most entertaining outcome and the most ironic outcome would be that dogecoin becomes the currency of Earth in the future.” Earlier this week Musk tweeted that he will do another Clubhouse session together with Kanye West.
All talk 🗣
The era of social audio is in full swing, with podcasts and Clubhouse having led the way. But there are many other audio startups joining the space. One of them Quilt, an audio social network that focuses on wellness and community, raised a $3.5 million seed round led by Mayfield Fund.
Founded by Ashley Sumner, Quilt started as a community platform to let local folks meet up with one another in their own homes. Sumner was previously on the founding team at NeueHouse and has spent her career building community through physical space. Thousands of Quilt conversations were happening out of peoples’ homes until the pandemic struck in March, resulting in an existential crisis for the startup. Sumner quickly moved Quilt over to Zoom but realized that video chat didn’t quite capture the magic that was happening in person. Also, Zoom did not foster the type of conversations that had made Quilt so special. She worked to develop an audio app that would become the new Quilt 2.0, which went live at the end of January.
Quilt allows anyone to start a room for a conversation, dropping a line or two of text to describe what they want to talk about. The app is focused on wellness, breaking rooms into three different categories: spiritual and personal development, career and purpose, and relationships, sex, and family. The Quilt team is currently made up of eight people, 50% of whom are female and 25% of whom are non-Black people of color. 20% are LGBT and 10% are non-binary.
Zucked 😱
Facebook is reportedly building an audio chat product that is similar to the popular social audio app Clubhouse. Clubhouse has gained popularity and buzz for letting people gather in audio chat rooms to talk about various topics. Mark Zuckerberg, Facebook’s founder, and CEO has been interested in audio communication forms. He appeared in the Clubhouse app on Sunday to chat about augmented and virtual reality. Facebook executives have ordered employees to create a similar product, said people, who were not authorized to speak publicly. The product is in its earliest stages of development.
Facebook has a reputation and history of breaking into new technologies and mediums that have attracted young users. For example, Zuckerberg bought Instagram, the messaging app WhatsApp, and the virtual reality company Oculus when they all were small start-ups.
Facebook is also known for being willing to clone its competitors. In Facebook’s ownership, Instagram in 2016 copied one of the marquee features of rival Snapchat, “Stories”. Last year, Instagram debuted “Reels,” a TikTok-like video product. When Zoom became popular last year, Facebook quickly created Rooms, a group video chat service. And this year, Facebook has been working on a competing product to Substack, the newsletter service (which In The Money also runs on).
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Reddit’s fresh funding 💰
After the retail stock trading frenzy (see the two previous editions of ITM for the whole backstory), Reddit, the social community raised $250 million to handle the rush of new subscribers. With the fresh funding, the company doubled in value to $6 billion. Reddit now has more than 50 million daily active users. The round was announced on Monday and led by venture capital firm Vy Capital. Reddit was valued at $3 billion in its last round in February 2019, and the surge in its value follows a 90% jump in advertising revenue from a year ago. Reddit is not the only company to have benefited from the trading frenzy – Clubhouse (earlier mentioned in this newsletter) also has seen its valuation surge to $1 billion after raising fresh funds last month.
Savage 💥
Savage X Fenty, Rihanna’s two-year-old online lingerie brand raised a $115 million funding in a Series B round, led by L Catterton, the private equity firm backed by LVMH. The fresh funding brought Savage’s valuation to more than $1 billion. In a statement, the luxury conglomerate LVMH told “LVMH and Rihanna reaffirm their ambition to concentrate on the growth and long-term development of the Fenty ecosystem focusing on cosmetics, skincare, and lingerie”. Fenty Beauty is backed by LVMH’s beauty incubator Kendo and Savage X Fenty was launched as a joint venture between Rihanna and TechStyle Fashion Group.
This news comes accompanied by a statement that Rihanna’s high-end fashion brand, Fenty Maison, is put on ice less than two years after its launch. “Rihanna and LVMH have jointly made the decision to put on hold the ready-to-wear activity based in Europe, pending better conditions,” LVMH said in a statement on Wednesday.
Woman of the Week
Whitney Wolfe Herd
In honor of Bumble’s IPO on Thursday, I could not think of a better woman to highlight this week than Bumble’s founder and CEO, Whitney Wolfe Herd. Let’s learn how she became to be a billionaire at 31 and the youngest female founder to take her company public.
Wolfe Herd was born in Salt Lake City, Utah, where she attended Judge Memorial Catholic High School. When she was in fourth grade, the family went on a sabbatical in Paris, France, and she became fluent in French. Wolfe Herd attended Southern Methodist University, where she majored in international studies. During her junior year, she went back to Paris to study abroad at Sorbonne University.
While in college and at the age of 20, she started a business selling bamboo tote bags to benefit areas affected by the BP oil spill. Wolfe Herd partnered with celebrity stylist Patrick Aufdenkamp to launch a non-profit organization called the "Help Us Project." The bags received national press after celebrities such as Rachel Zoe and Nicole Richie were photographed with them. Soon after, she started a second business with Aufdenkamp called "Tender Heart," a clothing line dedicated to raising awareness around human trafficking and fair trade. After graduating, Wolfe Herd worked with orphanages in Southeast Asia.
At 22, Wolfe Herd joined Hatch Labs, through which’s incubator she became involved with the startup Cardify, a project led by Sean Rad. The project was later abandoned, but Wolfe Herd joined the team for the dating app Tinder with Rad and Chris Gulczynski within the startup incubator in 2012. Wolfe Herd became vice president of marketing for Tinder. Reportedly she was behind the name of the app, taking inspiration from the flame logo and the idea of tinder. She has also been credited for growing the app’s user base by fueling its popularity on college campuses. In 2014, Wolfe Herd left the company due to growing tensions with other company executives. After leaving the company, Wolfe Herd filed a lawsuit against Tinder for sexual harassment. She reportedly received more than $1 million and stock as part of a settlement.
After leaving Tinder Wolfe Herd moved to Austin, Texas, and founded Bumble, a female-focused dating app in December 2014. Only one year after founding Bumble, the app had reached over 15 million conversations and 80 million matches. The Russian billionaire Andrey Andreev and founder of Badoo contacted her about creating a dating platform and partnered with her. The idea was to build a women-centric platform that would offer women a safe place to date.
“The importance of a woman making the first move is not exclusive to the world of dating, romance, or love. It is a powerful shift, giving women confidence and control. It ignites healthier connections, which lead to relationships rooted in kindness, accountability, and equality”
In November 2019, Bumble's parent company MagicLab was sold to the private equity firm The Blackstone Group, with co-founder Andreev selling his entire stake in both Bumble and, Badoo. Wolfe Herd became CEO of the newly acquired MagicLab. In 2020, she renamed the parent company to Bumble. Together, Bumble and Badoo operate in 150 countries and have 42 million monthly active users as of the third quarter of 2020.
In 2020, Forbes listed Herd as 39 of the top 100 "America's richest self-made women" (the IPO is likely to move her up this list). Wolfe Herd, who owns an 11.6% stake in Bumble, became the youngest self-made woman billionaire with the company’s public listing. Bumble’s initial public offering prospectus showed that Wolfe Herd holds 21.5 million shares. At a stock price of $74.26 around mid-day Eastern Time on Thursday, those shares were worth $1.6 billion.
Thank you so much for reading this week’s newsletter. I would love to hear your feedback and please share this with a few friends you think would find this interesting. Have a lovely weekend 💜
I’m Marianne, an early-stage VC based in Stockholm. You can reach me by replying to this email, or find me on Twitter or LinkedIn.