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How COVID-19 and a ‘Great Reimagining’ reshaped the Fortune 500

June 2, 2021, 8:30 AM UTC

The pandemic could have been a jarring setback for Square. Cofounded in 2009 by CEO Jack Dorsey—also, of course, famously the cofounder and CEO of Twitter—the company is perhaps best known for its distinctive, white credit-card readers that make it easy for small businesses to process payments from a smartphone or tablet. Square barreled into 2020 with powerful momentum, with its sales having soared 43% in the previous 12 months. But the lockdowns that began last March as COVID-19 spread across the U.S. dealt a devastating blow to Square’s core customers: mom-and-pop businesses.

With one business line under mortal threat, Dorsey and his team had another innovation ready that was made for the moment—the Cash App payment service.

Created to compete with the likes of PayPal, PayPal-owned Venmo, and Apple Pay, among others, Cash App exploded in popularity thanks to capabilities that other digital wallets couldn’t match. Because Cash App allows direct deposits, many users had their stimulus checks sent straight to their Cash App accounts. And the fact that the digital wallet allows users to trade Bitcoin and fractional shares of stocks meant that Cash App was in a perfect position to, ahem, cash in when cryptocurrency prices and day trading took off. By December, Cash App had more than 36 million active monthly users, or a 50% gain in one year. 

Square rode Cash App’s success to explosive sales growth—and its first-ever spot on the Fortune 500, at No. 323. For the year, its revenue jumped by just over 100%, to $9.5 billion. And its shareholders were rewarded with a nearly 250% return for 2020. That propelled its market value from $20 billion last March to $100 billion by year’s end. 

Not every company on this year’s Fortune 500 can match Square’s performance, of course. Most can’t come close. But in a couple of significant ways, the story of Square is emblematic of the 500 in 2020 overall: First, the world became even more digital—and fast. And second, new technologies suddenly broke through and achieved tremendous scale.

That potent combination of trends has opened up vast new opportunities for businesses that can quickly adapt to a world of rewritten rules. Call it the Great Reimagining.

The examples range from the everyday to the extraordinary. Think of Chewy, the online pet supply business (recently split off from retailer PetSmart) which grew sales 47% last year to join the list for the first time at No. 403, as homebound puppy owners ordered pee pads from their phones. Or Pfizer, No. 77, which partnered with German biotechnology company BioNTech to develop a vaccine for COVID-19 in record time, thanks to its revolutionary approach of using messenger RNA to create an immune response—opening up endless possibilities for synthetic biology.

That’s not to say that there wasn’t plenty of economic pain last year. A total of 108 companies on this year’s 500 list lost a combined $224 billion—the biggest loss since the Great Recession. Energy, hotels, airlines, and restaurants were all hit hard. But the strength of tech—sector revenue grew by $94 billion—served as a buoy. Overall, the Fortune 500’s sales fell by 3.1% to $13.8 trillion, which was still the second biggest total in the history of the list. And the U.S. economy’s booming 6.4% growth in the first quarter of 2021 suggests that the 500 could be reaching new highs as soon as next year.

For companies seeking to lean into that growth and build on it, there is widespread understanding that returning to a pre-pandemic approach to digital transformation won’t cut it. That lesson was driven home as consumers changed overnight how, where, and why they buy things, and plunged headlong into using brand-new technologies.

“What CEOs suddenly realized,” says Jeff Wong, global chief innovation officer at EY, “is that they need to accelerate all that transformation that they had planned on from before but hadn’t quite executed against.” Continues Wong: “I think what we’re seeing is that it’s actually accelerating as we come out of this pandemic.”

Consider that a recent survey of more than 300 CEOs of big companies conducted by EY found that 65% of them plan to spend more investing in transformation over the next three years than they did in the past three. And 68% say they’re planning a major investment in data technology.

Square is certainly not slowing down. Over the first three months of 2021, sales at Dorsey’s company were 266% higher than those from the same quarter last year. Square also introduced new features to Cash App, including the capability for users to send Bitcoin to friends or family for free. A year or two ago, making that kind of transaction happen so easily might have seemed unimaginable. Not anymore. 

This article appears in the June/July 2021 issue of Fortune with the headline, “A massive crisis, a great reimagining.”

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