Apple's Epic battle, electric vehicles, and ESG investing at record highs
Welcome to Nº 23 of In The Money, your weekly newsletter on keeping up with all things finance, tech, and startups. As always, this week’s newsletter is filled with all the financy things. This week Apple faced its Epic battle, but we also got some hints about a foldable iPhone. Honest Company, founded by actress Jessica Alba went public and surged in its debut. We also learned of the succession plans of Warren Buffett. Peloton recalled all of its treadmills (imagine the logistics of recalling over 125,000 machines). Dogecoin, the cryptocurrency that started as a joke, has surged 12,000% since the beginning of the year – I’m not kidding. The power couple, Bill and Melinda Gates announced their divorce. The fitness company Equinox is planning to go public through a SPAC. Sustainable investing gains momentum. This and much more. I hope you enjoy this edition.
Female central bankers 👩💼
Two of Europe’s most senior female central bankers have called for more decisive action to promote women’s careers in economics. In an interview with the Financial Times, Isabel Schnabel, executive board member of the European Central Bank (ECB), revealed that she was often the only woman in meetings. Having another woman present “makes such a big difference” to the tone of a discussion and how decisions are made, she said. She also noted the many “hidden barriers” to women’s careers, such as male-dominated selection processes and networks. The other senior female central banker, Margarita Delgado, deputy governor of the Bank of Spain, told the Financial Times: “I don’t have a firm belief in quotas, but I see their advantage because to meet them, you need to draw up a plan. You can’t create women out of nothing. You need to have a strategy.” The ECB was recently criticized by some media outlets for organizing a conference with only female speakers, a decision Schnabel defended on Twitter.
The lack of women among Europe’s top central bankers was highlighted shortly after Lagarde became the ECB’s first female president in 2019 (you can read more about Christine Lagarde as the Woman of the week in this edition of ITM) when she posted on Twitter a photo of herself and the other members, all of whom were male. One observer pointed out there were more women hanging in pictures on the wall than sitting around the table. You really need to see the picture. Lagarde believes sexism is still widespread. Last week she commented that there is “plenty of that still going around. I still experience it, of course. I do see market observers who have those vaguely dismissive and often patronizing comments about what I do, or what I wear, or what I say.” The ECB’s interest rate-setting council is made up of 19 national central bank governors and six executives. Since the central bank was created more than two decades ago, there has been only one woman among the 65 national central bank governors who have sat on the council. Five out of 24 executives have been female, including Lagarde and Schnabel. However, there is little the ECB itself can do about this because its council members are appointed by national governments. The central bank also missed internal targets for increasing its share of female managers by 2019. Under Lagarde, it has set new objectives to raise the percentage of women among managers from 30% to 36% by 2026. The plan includes a commitment that half of most appointments should be female. It also requires every selection committee to have at least two women and makes senior managers accountable for hitting gender diversity targets.
An Honest IPO 🔔
Honest Company, the consumer goods company founded by actress Jessica Alba, went public on Wednesday. The shares jumped as much as 36% on the debut. The day before, the company said it sold 25.8 million shares at $16 each, raising $412.8 million. The IPO values Honest at $1.44 billion. According to Jessica Alba, the public market debut will start a new stage of growth for the consumer products company. “I feel like this is where we really dig into this next phase of growth, and this is really the beginning for us in a lot of ways,” Alba said in an interview on CNBC. Alba founded the company a decade ago, starting with baby products. Since then, the company’s product portfolio has expanded to include makeup, sunscreen, and cleaning supplies, all with the promise of transparency around its formulas. That pledge has made it a target of criticism in the past for failing to live up to that standard. In 2016, the company came under scrutiny, when a lawsuit said its products contained a harsh chemical it had pledged to avoid. Honest then reached a $7.35 million settlement for wrongly labeling ingredients in some products as natural, plant-based, or chemical-free. Last year, Honest’s net sales grew 27.6% to $300.5 million, and the company narrowed its net loss to $15 million. Roughly 55% of its sales come from digital orders. Honest’s use of social media, particularly on Alba’s own accounts, has helped drive digital growth. The Los Angeles-based company is now listed on Nasdaq under the symbol "HNST".
Apple’s fight in Europe …
Last Friday the European Commission said that Apple has “abused its dominant position” in the distribution of music streaming apps through its App Store. The Commission further argued that Apple has a monopoly on that market. Monopoly refers to when one company dominates a sector or industry. The term is often used to describe a firm that has total or near-total control of a market. The European Commission opened an antitrust investigation into the App Store last year after the music streaming platform Spotify complained in 2019 about Apple’s license agreements. The license agreement implies that app developers have to pay a 30% commission on all subscription fees that come through the App Store. The Commission’s investigation showed that most streaming providers passed this fee (Apple’s 30% cut) on to end-users by raising prices. Another issue the Commission said it was concerned with is that app developers are unable to inform users of alternative ways to purchase the same apps elsewhere, which are usually cheaper. Apple now has to reply to the commission’s concerns either in writing or via an oral hearing. Apple isn’t currently facing any antitrust charges from government officials in the US. But even if the government declines to press charges, recent actions in Congress, state legislatures, and in private lawsuits demonstrate a significant shift in the American public’s sentiment toward Apple and the tech industry at large. And speaking of that…
and its Epic battle in the US 💥
… on Monday the battle between Epic Games and Apple began with both Apple and Epic have released their opening presentations (you can see the full presentations here) on why they feel they should win the trial, which is set to determine the future of the App Store. Epic wants to force Apple to open up iPhone software distribution so it could use its own payment processor, and so bypass Apple’s customary 30% fee. A favorable ruling could even allow Epic to offer its own app store for iPhones. On the other side, Apple is arguing that it built the App Store and gets to set the rules, which are designed to ensure that apps are secure and of high quality. Epic’s argument is that Apple’s App Store is anti-competitive and that its arguments about quality and security are essentially an excuse to exclude competitors like Epic Games’ title Fortnite. Fortnite was booted from Apple’s store last year after it introduced a direct payment mechanism. The trial is expected to last three weeks.
Also, how about a foldable iPhone? 📱
In other Apple news, a top Apple analyst predicted the company will likely launch a foldable iPhone in 2023. TFI Securities analyst Ming-Chi Kuo said on Monday that the new model will likely have an 8-inch foldable OLED display. That means it might work like an iPhone that can open up to a tablet with a screen slightly larger than the 7.9-inch display on an iPad mini. The analysis is based on an industry survey, and Kuo believes the foldable iPhone will reach 15 million to 20 million units in 2023. In a note to clients, Kuo said that the foldable model is now a “must-have” for major smartphone brands. “After 5G, the foldable smartphone is the next innovative selling point of high-end models,” he wrote. Samsung, Huawei, and Xiaomi have each introduced foldable models, though the price still makes them relatively inaccessible to most consumers. Apple also has some hurdles it may need to overcome. All of Apple’s iPads, for example, support drawing input with an Apple Pencil. But most foldable phones don’t support pen input since they’re relatively fragile compared with traditional phone screens.
On sale 🏷
On Monday, Verizon announced the sale of its media group to private equity firm Apollo Global Management for $5 billion. The sale allows Verizon to offload properties from the former internet empires of AOL and Yahoo. Verizon will keep a 10% stake in the media group company which will be rebranded to just Yahoo. The sale sees the online media brands go to Apollo at much lower valuations than they had just a few years ago. Verizon bought AOL for $4.4 billion in 2015 and Yahoo in 2017 for $4.5 billion. Apollo will pay Verizon $4.25 billion in cash, along with preferred interests of $750 million. The transaction is expected to close in the second half of 2021. There has been increasing evidence recently that Verizon wanted to sell off its media properties to focus on its wireless networks and other internet provider businesses instead. Last year, Verizon sold HuffPost to BuzzFeed. Recently it also sold off or shut down other media properties like Tumblr and Yahoo Answers. Before that, Verizon’s original vision was to turn Yahoo and AOL properties into online media behemoths that could take on Google and Facebook. Under former AOL CEO, Tim Armstrong, the Yahoo and AOL brands were converted into a new division within Verizon called Oath. But the Oath project failed to gain momentum, and Armstrong left the company in 2018. Oath rebranded again as Verizon Media Group in 2018 and was run by Guru Gowrappan. Gowrappan will continue to lead Yahoo under Apollo.
Succession 🤝
The question of who would take over after Warren Buffett at Berkshire Hathaway has been a source of speculation for over 15 years. For the millions of people who tuned into the Berkshire Hathaway annual meeting on Saturday, careful viewers have rewarded the news of who will be the next CEO of the company. In response to a question about whether the company would eventually be too complex to manage, “Greg will keep the culture,” the 97-year-old Berkshire Vice Chairman Charlie Munger said simply, explaining that the company’s decentralized nature would outlast him and Warren Buffett. “The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning,” Buffett continued.
Equinox SPAC 🏋️♂️
Equinox, the high-end fitness company, is in talks to go public via a SPAC headed by Chamath Palihapitiya. The deal is targeting a valuation of 22 times the estimated EBITDA of $320 million, with the PIPE investment potentially reaching $2 billion. Overall, the company is targeting a valuation of more than $7 billion. Palihapitiya’s Social Capital VI is the special purpose acquisition company or SPAC, that would take Equinox public through a reverse merger. The deal was also shopped to a number of other potential SPAC sponsors. Equinox, which also owns SoulCycle and Blink Fitness, among others, has been hit hard by the pandemic with some clubs forced to close. Social Capital, which trades under the ticker IPOF, slid roughly 2% on the report on Wednesday. For the year, shares are down 17%.
Treadmill disaster 🏃♀️
In a major reversal, Peloton announced voluntary recalls of both its Tread+ and Tread treadmill machines over safety concerns on Wednesday. The company saw its shares tank more than 14% on the news. The shares closed Wednesday down nearly 15%, wiping $4.1 billion off its market value in one day. The company is advising customers who already have the products to immediately stop using them and contact Peloton for a full refund or other qualified remedies. The recall affects about 125,000 Tread+ machines and 1,050 Tread products in the US. Last month the US Consumer Product Safety Commission warned about Peloton’s Tread+ product after one child died in an incident involving the machine and dozens of other reported injuries. At the time Peloton pushed back on the recommended recall and told customers there was no reason to stop using its treadmills. “I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+, We should have engaged more productively with them from the outset. For that, I apologize,” CEO John Foley said in a statement. Peloton further said it will work with the CPSC to set new industry safety standards for treadmills. If this wasn’t enough, Peloton also recently faced a serious cybersecurity breach that exposed users’ private account data. On Thursday the company said it expects its fiscal fourth-quarter sales to take a $165 million hit due to the treadmill recall.
Uber goes electric 🔌
Uber is partnering with Arrival, the electric vehicle (EV) manufacturer to create an EV for its ride-hail drivers. Arrival expects to reveal the final design before the end of the year and to begin production in the third quarter of 2023. To ensure the vehicles are built to suit drivers’ needs, Uber drivers have been invited to contribute to the design process. Last year Uber made a promise it made to become a fully electric mobility platform by 2025 in London, 2030 in North America and Europe, and platform-wide by 2040. The company recently launched Uber Green, which gives passengers the opportunity to select an EV at no extra cost and drivers a chance to pay a lower service fee. This is part of its $800 million initiative to get more drivers in EVs. London, where Arrival is based, aims for its entire transport system to be zero-emission by 2050 and will create zero-emissions zones in central London. The partnership with Uber marks Arrival’s first move into electric car development. Following a SPAC with CIIG in March, Arrival began publicly trading. It is one of many EV companies to hit the markets via a SPAC as opposed to the traditional, and slower, IPO route.
Uber also released first-quarter earnings this week. Uber beat estimates on the top line, dramatically improved its net losses, but missed on revenue. Shares initially gained in after-hours trading before dipping more than 4.5%.
Here’s how Uber did versus expectations:
Loss: 6 cents vs. 54 cents expected
Revenue: $2.90 billion vs. $3.29 billion expected
It’s difficult for investors to compare year-over-year numbers from the company, as the pandemic began to take hold a year ago and severely restricted travel. However, ride-hailing companies are beginning to bounce back from their pandemic lows. Overall, Uber’s net loss was $108 million, a tremendous improvement from a $968 million loss in its fourth quarter of 2020. However, that was largely due to a $1.6 billion gain from the sale of its self-driving unit, ATG. Uber’s operating loss was still high at more than $1.5 billion for the quarter. Uber reaffirmed that it expects to reach profitability on an adjusted EBITDA basis by the end of this year.
Etsy earnings 📌
Another company that released earnings this week was Etsy, which unlike Uber enjoyed a positive impact from the pandemic. Etsy stock dropped more than 9% in after-hours trading on Wednesday after the company reported first-quarter earnings results. The shares dropped despite the fact that earnings surpassed analysts’ estimates. Instead, the market reacted to the company’s warning that it expects the total sale of goods on its platform to slow in the second quarter as it faces tough comparisons to last year’s pandemic-boosted results.
Here’s how the company did vs. expectations:
Earnings: $1.00 per share, adjusted, vs $0.88 expected
Revenue: $551 million, vs $530 million expected
The online marketplace said it forecasts second-quarter gross merchandise sales between $2.8 billion and $3.1 billion, representing growth of 5% to 15% from last year’s quarter. Gross merchandise sales is a closely-watched metric in the industry that measures the total value of goods sold on the site.
Nio enters Norway 🚗
Coming back to the electric vehicle (EV) market. On Thursday, Chinese electric car start-up Nio plans to begin deliveries of its vehicles in Norway in September. This will be the company’s first entry into a market outside China. Nio plans to first launch its ES8 SUV to the new market in September this year, followed by its ET7 sedan in 2022. The company also anticipates expanding its local staff of 15 people to 50 by the end of the year. The Norway venture will begin with a flagship “Nio House” store in Oslo. Four smaller showrooms are set to open in other parts of Norway during next year. In fact, more than half the new cars sold in Norway last year were battery-powered electric vehicles. Other Chinese electric car makers are already selling to Norway. The US-listed Xpeng delivered 100 units of its G3 electric SUV in December.
What’s next for the auto industry 🔮
And from startup vehicle makers to historical behemoths in the auto industry. Since taking over the helm of General Motors (GM) in 2014, CEO Mary Barra has cut costs, slashed 64,000 jobs, exited unprofitable markets overseas, and pledged to become an all-electric auto company by 2035. Today, Barra’s GM looks very different than the one she inherited out of the financial crisis. Though controversial at times, each of her decisions took GM one step closer to where it is today: poised for growth in new markets. During Wednesday’s earnings call, Barra told investors that GM will be leveraging its core business, to target trillions in future markets that stretch far beyond just selling cars and trucks. “This is just the beginning for the next generation of General Motors. We are well on track with our plans to transform our company and lead the industry into the future.” Barra said. Much of the expansion is led by GM’s global growth and innovation team. New businesses from the team have included electric commercial vehicles, auto insurance, military defense, and expanding services of its connected OnStar brand. And more new ventures are on the way. The innovation division has identified $1.3 trillion in new market opportunities that it believes complements its core business and it has a right to “win in,” Barra continued. That does not include GM’s majority-owned autonomous vehicle unit Cruise, which could be an $8 trillion market in the future. General Motors’ first-quarter results blew away Wall Street earnings expectations.
Here’s how GM did compared with what Wall Street expected:
Adjusted EPS (earnings per share): $2.25 vs. $1.04 expected
Revenue: $32.47 billion, vs. $32.67 billion expected
Breakup 👋
Bill and Melinda Gates have announced their divorce after 27 years of marriage, saying "we no longer believe we can grow together as a couple". They first met in the 1980s when Melinda joined Microsoft, the company that Bill founded. For decades, the Gates couple has been a powerful force with their vast charitable contributions. The Bill and Melinda Gates Foundation, with an endowment of some $50 billion, has had immense influence in fields like global health and early childhood education and has made great strides in reducing deaths caused by infectious diseases. Over the past year, the couple has been especially visible, with the worldwide fight against Covid-19 as their foundation spent more than $1 billion to combat the pandemic. The foundation said in a statement that both Bill and Melinda would remain co-chairs and trustees and that no changes were expected at the organization. Melinda could assume even more influence in the years ahead. Melinda already has her own firm, Pivotal Ventures. She has used to invest in issues related to women’s economic empowerment. Bill also has his own private office, Gates Ventures, for pursuing interests outside the foundation. Should she receive a portion of Mr. Gates’s Microsoft holdings, she could set up a new foundation or make direct gifts to other causes she supports. In 2019, Jeff Bezos, the founder of Amazon, and his longtime wife, MacKenzie Scott, divorced. MacKenzie received Amazon shares worth $36 billion at the time and immediately set about giving away billions of dollars in direct grants to a variety of progressive organizations.
Scroll on Twitter 🐦
On Tuesday, Twitter announced that it has acquired Scroll, a $5-a-month subscription service that removes ads from participating news sites. Twitter is working on building out a new kind of subscription plan that will include Scroll. Twitter also recently acquired Revue newsletter service. In a blog post announcing the deal, Scroll CEO Tony Haile says that one reason he sold the company is that “Twitter’s ambitions are larger than people suspect.” The Scroll service uses third-party cookies or browser extensions to tell websites to not serve ads to you. It’s not an ad-blocker per se but instead sends a portion of your subscription fee to the participating websites you visit. It’s a little difficult to divine exactly what Twitter intends to do with Scroll. Twitter is definitely building a subscription service that will put together a bunch of services. What exactly will be included, what it will cost, and who will share in the revenue is not known. This week, Twitter also announced that Twitter Spaces, the company’s new live audio rooms feature, is opening up more broadly. It is making Twitter Spaces available to any account with 600 followers or more, including both iOS and Android users. It also officially unveiled some of the features it’s preparing to launch, like Ticketed Spaces, scheduling features, reminders, support for co-hosting, accessibility improvements, and more.
Nextdoor got Zucked 🚪
Facebook is launching a new section of its app designed to connect neighbors and curate news at neighborhood-level. The new feature, predictably called Neighborhoods, is available now in Canada and will be rolling out soon for users in the US. On Neighborhoods, users can create a separate sub-profile and populate it with interests and a custom bio. You can join your own lower-case neighborhood and nearby neighborhoods. The feature is very much like Nextdoor, the social networking service for neighborhoods. Aware of the intense moderation headaches on Nextdoor, Facebook says that it will have a set of moderators dedicated to Neighborhoods who will review comments and posts to keep matters “relevant and kind.” It will also come with blocking features. As for privacy, well, it’s Facebook. Neighborhoods isn’t its own standalone app and as such will be sharing your neighborly behavior to serve you targeted ads elsewhere.
Also, this week, Facebook announced that its Workplace enterprise communications software has now reached 7 million paid subscribers, up 40% from last May. Workplace is software that companies can use as their internal social network to communicate with their employees. Launched in 2016, Workplace counts companies such as Spotify and Starbucks among its clients. Workplace still trails well behind its top rivals. Microsoft last month announced that its Teams product now has more than 145 million daily active users. Slack no longer breaks out user figures, but the company claimed 12 million daily active users in September 2019, the last time it reported that statistic. Slack’s number of paying customers increased nearly 42% from 110,000 in March 2020 to 156,000 in March 2021, the company announced. Workplace is also fairly immaterial to Facebook’s financial results. The company has not broken out how much Workplace contributes to its revenue, but the service is counted alongside its Oculus and Portal hardware devices under the “Other” business label in its financial results. During the first quarter of 2021, “Other” made up about 2.8% of Facebook’s revenue.
Lord of the Oura 💍
Ok, here comes a proud Finnish brag moment. For those of you who did not know, I’m Finland-born and raised. On Tuesday, Oura, the company best known for the Oura Ring, a smart ring used to track sleep and physical activities, announced a $100 million Series C. It’s been a wild couple of years for the Oulu, Finland founded, Oura. 2020, in particular, proved to be a major driver for the wearable fitness manufacturer. The pandemic brought professional sports to a screeching halt in 2020, but a number of major leagues adopted the ring, including the NBA, WNBA, UFC, and NASCAR. Furthermore, the company has been making a major push into health research courtesy of UCSF, which has published peer-review studies around the ring’s temperature monitor. That feature made news as it could point to larger issues, including the early stages of COVID-19. The new funding round was led by The Chernin Group and Elysian Park (the Dodgers’ investment arm), which brought the wearable company’s total funding up to $148.3 million. New investors include Temasek, JAZZ Venture Partners, and Eisai, joining existing investors Forerunner Ventures, Square, MSD Capital, Marc Benioff, Lifeline Ventures, Metaplanet Holdings, and Next Ventures. The company initially set itself apart by its form as a ring, joining a crowded field that largely revolved around the wrist. To date, Oura has sold more than 500,000 rings. “The wearables industry is transitioning from activity trackers to health platforms that can improve people’s lives. Oura focused first on sleep because it’s a daily habit, and lack of sleep has been linked to worsening health conditions including diabetes, cardiac disease, Alzheimer’s, cancer, poor mental health, and more,” Oura CEO Harpreet Singh Rai said in a press release.
Another Finnish company that raised funding this week was the mobile gaming company, Metacore. The company, known particularly for its game, Merge Mansion raised $180 million from Supercell, another super successful Finnish gaming company. Metacore had already raised $17.7 million in equity and $11.8 million in debt from Supercell in September 2020.
Dogecoin to the moon 🚀
The latest cryptocurrency to surge is Dogecoin, named after a meme of a Shiba Inu dog and that was started as a joke. Dogecoin’s price has been on the rise, but on Tuesday Dogecoin’s price surged roughly 40%. With that the coin reached a market cap of $69 billion, making it the fourth-largest cryptocurrency behind Bitcoin, Ethereum, and Binance coin. On Wednesday Dogecoin was soaring again, surging 20% and briefly trading at just over 69 cents. The value of the cryptocurrency is up more than 600% in just a few weeks and more than 12,000% since the beginning of the year. Analysts say that the latest run in Dogecoin is because many cryptocurrency traders do not want to miss out on any buzz that stems from Elon Musk’s hosting of Saturday Night Live on May 8th. I also read that the co-founder of Dogecoin sold all his coins back in 2015. The proceeds were just enough for him to afford a Honda Civic. Today the market cap of Dogecoin is bigger than that of Honda’s. If you bought Dogecoin at the beginning of the year you’ve enjoyed the gain of 12,000%. A $1,000 Dogecoin purchase on January 1st, 2021 at a price of less than a cent per coin would be worth $121,052 at Wednesday’s high of 69 cents. I’m not kidding.
Dogecoin is not the only cryptocurrency that has surged recently, Ether, the digital coin linked to the Ethereum blockchain, hit an all-time high of $3,456.57 on Tuesday, extending a rally that seen its price gain over 350% this year. Ethereum is different from other cryptocurrencies, such as Bitcoin. Ethereum acts more as a platform that developers can build apps on. Ethereum is the name of the network or underlying blockchain technology, while Ether is the digital currency used to power the platform.
ESG investing at record highs 📈
During the first quarter, sustainability-focused funds attracted record inflows. Global assets under management in ESG funds, increased to nearly $2 trillion, according to a report from Morningstar released last Friday. The rise underscores the momentum behind ESG investing. Assets in these types of funds first topped $1 trillion in the second quarter of 2020, before growing to $1.984 trillion by the end of the first quarter of 2021. Global sustainable funds attracted a record $185.3 billion during the first quarter of 2021, up 17% quarter over quarter. Overall, assets in ESG funds increased 17.8% compared to the fourth quarter of 2020. Europe accounted for over 79% of total fund flows. Other regions are also allocating more and more to ESG funds. In the US, sustainability-focused funds attracted nearly $21.5 billion in net inflows, which is a new record. The figure more than doubled year over year, up from $10.4 billion during the first quarter of 2020. You can find a guide to sustainable investing, in a previous edition of ITM.
Woman of the week
Christine Lagarde
Christine Lagarde is the President of the European Central Bank (ECB), the first woman to head the ECB.
Lagarde was born in Paris, France, into a family of teachers. Her father was a professor of English and her mother was a Latin, Greek, and French literature teacher. After her baccalauréat in 1973, she went on an American Field Service scholarship to the Holton-Arms School in Bethesda, Maryland. During her year in the US, Lagarde worked as an intern at the US Capitol as Representative William Cohen's congressional assistant, helping him correspond with French-speaking constituents. She graduated from Paris West University Nanterre La Défense, with a master's degree in English, labor law, and social law. She also holds a master's degree from the Institut d'études politiques in Aix-en-Provence. Since 2010, she has presided over the Aix school's board of directors. After graduating, Lagarde joined Baker & McKenzie, a large Chicago-based international law firm, in 1981. She handled major antitrust and labor cases and was made partner after six years and was named head of the firm in Western Europe. She joined the executive committee in 1995 and was elected the company's first female chairman in 1999. In 2004, she became president of the Global Strategic Committee.
“If female were working in the same proportion as men do, the level of GDP would be up 27 percent in a country like India, but also up 9 percent in Japan and up 5 percent in the United States of America. It's not just a moral issue, not just a philosophical issue. It just makes economic sense.”
Between 2005 and 2007, Lagarde was France's Trade Minister, where she prioritized opening new markets for the country's products, focusing on the technology sector. In May 2007, she was moved to the Ministry of Agriculture. The following month she joined the Ministry of Economic Affairs, Finance, and Employment. In May 2011, Lagarde announced her candidacy to be head of the IMF (International Monetary Fund) to succeed Dominique Strauss-Kahn, upon his resignation. On 28 June 2011, the IMF board elected Lagarde as its next managing director and chairman for a five-year term. Lagarde became the first woman to be elected as the head of the IMF.
“When women do better, economies do better.”
In July 2019, Lagarde was nominated to serve as the next president of the ECB, to succeed Mario Draghi. Subsequently, she submitted her resignation as managing director of IFM. On 17 September 2019, the European Parliament voted via secret ballot to recommend her to the position, with 394 in favor, 206 opposed, and 49 abstentions. Confirmed by the European Council in its October summit, Lagarde became the first woman to serve as ECB President. When addressing the European Parliament's ECON Committee ahead of her appointment, Lagarde expressed her willingness to make the ECB play a role in fighting climate change and to carry out a review of the ECB's monetary policy framework.
Lagarde is ranked as No. 2 on Forbes most powerful women 2020 list.
Thank you so much for reading In The Money. 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.