Much of the business world shutters operations in the wake of coronavirus
Good morning, Term Sheet readers.
It feels a bit strange to be making this announcement as there are immensely more important things going on in the world at the moment, but after five incredible years, Friday will be my last day at Fortune.
I’m leaving to build my weekly newsletter The Profile into a standalone business. Right now, it features a compilation of longform profiles on interesting people and companies, but I believe it can grow to be much more. After writing about so many people’s entrepreneurial paths, I hope to pave my own. You can sign up here.
Not to worry, Term Sheet will continue its regularly scheduled programming, and you’ll be left in capable hands. I’ll keep this short and won’t get too sappy today, but tune in this Friday for more details on what’s to come.
Thank you all for trusting me with your stories in the last two and a half years. It’s been a huge honor to write this newsletter for you every morning. I’ll miss this awesome community beyond words, and I hope we stay in touch.
But now, let’s get to the news:
CLOSED FOR BUSINESS: Yesterday, “CLOSED” was one of the top trending topics on Twitter, and for good reason. A host of retail companies are closed for business, including Patagonia, Urban Outfitters, Warby Parker, Glossier, Everlane, Allbirds, Lululemon, Nike, Apple and Abercrombie.
So are small businesses across the nation. Last week, President Donald Trump announced that companies affected by the coronavirus outbreak will be given $50 billion more in low-interest loans federally guaranteed by the Small Business Administration. But small business owners still feel fear and uncertainty as customers stay at home, spend less, and wait for clarity.
HOW STARTUPS CAN HELP: The European Commission announced Friday that it’s looking for startups and small businesses developing technologies that could help combat the COVID-19 outbreak. The Commission encouraged them to apply for fast-track EU funding.
“We are calling for startups and small businesses with technologies and innovations in: treating, testing, monitoring, and other aspects of COVID19,” the European Commission said in a tweet.
XEROX’S AUDACIOUS QUEST TO BUY HP: In non-coronavirus news, my colleague Shawn Tully has a fascinating deep dive about Xerox’s bid to buy HP, its much larger rival. The offer is now set at $35 billion. How is that possible, you may wonder, given that Xerox is tiny compared to HP? Xerox posted sales of $9.1 billion—less than one-sixth of the $58.8 billion HP tallied in its most recent fiscal year.
Here’s some detail on how Xerox plans to finance the merger:
One person’s “bold,” of course, is another person’s crazy. To finance the merger, Xerox would take on $24 billion in new debt. “It makes no sense because all that debt would make the combined company much riskier,” says Bill George, former CEO of Medtronic and a professor at Harvard Business School. HP brass, who oppose the merger, argue that the leverage would threaten the companies’ survival. “You can’t work through economic cycles with that level of debt,” says CFO Steve Fieler, who calls Visentin’s $2 billion in planned annual savings “unachievable.”
- Impossible Foods, a Redwood City, Calif.-based plant-based meat company, raised approximately $500 million in Series F funding round. Mirae Asset Global Investments led the round, and was joined by investors including Khosla Ventures, Horizons Ventures, and Temasek.
- Cloudbeds, a San Diego-based hospitality management solution provider, raised $82 million in Series C funding. Viking Global Investors led the round, and was joined by investors including PeakSpan Capital, Recruit Co., Ltd., Counterpart Ventures and Cultivation Capital.
- ZeroNorth, a Boston-based provider of risk-based vulnerability orchestration across applications and infrastructure, raised $10 million in Series A+ funding. Crosslink Capital led the round, and was joined by investors including ClearSky, Rally Ventures and Petrillo Capital.
- LumenAd, a Missoula, Mt.-based provider of a leading advertising management platform, raised $2 million in seed funding. Next Frontier Capital led the round.
- Expense Robot, a Switzerland-based AI and financial technology startup, raised CHF 1.7 million ($1.8 million) in seed funding. Swisscom Ventures and SIX Group co-led the round.
- Compass Diversified Holdings will buy Marucci Sports, a Baton Rouge, La.-based manufacturer of baseball bats and baseball gear, for $200 million.