fortune--2020-05-28--House passes bill to extend 8-week period to spend PPP loans and alter the 75% rule

Small businesses may soon find more flexibility in the Paycheck Protection Program (PPP) as a bill passed the House on Thursday that would extend the time in which businesses need to spend funds and alter the rule that they must spend 75% of the funds on payroll for full forgiveness (that level would be reduced to 60%).
The bipartisan bill, titled the Paycheck Protection Program Flexibility Act and spearheaded by Democratic Rep. Dean Phillips and Republican Rep. Chip Roy, passed through the House in a nearly unanimous vote, 417 to 1.
The House bill proposes extending the time in which businesses must use the funds from eight weeks to 24 weeks; amending the 75/25 rule for how much businesses must spend on payroll versus non-payroll costs in order to get full forgiveness of the loan to 60/40; pushing back the deadline to rehire workers from June 30 to Dec. 31; and extending the two-year term for the loans to five years, among other provisions.
The Senate also has its own PPP extension bill, led by Sen. Marco Rubio (R-Fla.), chairman of the Committee on Small Business and Entrepreneurship, that would propose increasing that time frame from eight to 16 weeks, extend the deadline to apply for the PPP, and allow businesses to use funds to purchase protective equipment for employees, among several other amendments. Senators failed to pass the bill before adjourning for a recess this week, but will return next week.
Rep. Phillips said in a statement on Sunday before the vote that “Congress now has an opportunity to fix what’s broken and make this important relief program more accessible and usable to the small businesses that need it the most. Every day counts, and time cannot be wasted.”
Indeed, the first recipients of loans that opened up on April 3 are nearing the end of their eight-week period, and many small businesses and lobbyists have argued the time frame and payroll limits have made it challenging for businesses that remain unable to fully open (especially restaurants, bars, and salons) to use the funds.
The House’s legislation has been widely endorsed by various outside groups, including the U.S. Chamber of Commerce and the National Restaurant Association, among others.
Yet it’s unclear whether Republicans and Democrats can ultimately reach a compromise on legislation to amend rules for the $660 billion program.
“Small businesses continue to have a tough road ahead, and they need flexibility in how they use the emergency capital. And this provision gives them that,” Rep. Nydia Velázquez (D-N.Y.), the chair of the House Small Business Committee, said on the floor Thursday. “That will help ensure businesses have more room to breathe, even in places where reopening the economy happens more slowly.”
The House bill now heads to the Senate for a vote and must be signed by the President to become law. Rep. Phillips urged the Senate to “pass it without delay,” he wrote in a tweet after the vote.
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fortune--2020-05-28--Getting back to the office in the midst of coronavirus is going to be complicated

Americans are doing something surprising with their money right now

Good afternoon, readers.
How do you reopen a country—and workplaces specifically—on lockdown in the midst of a pandemic? We are… still figuring it out.
The Centers for Disease Control (CDC) this week revised its guidance regarding coronavirus antibody tests, the diagnostics which tell you whether or not you’ve recovered from and developed an immune response to COVID-19. The working theory is that these tests will eventually prove critical to wide-scale reopening since those who test positive for antibodies may be able to ward off the virus and thus have a lower chance of infecting other people, as well.
But not so fast, says the CDC—such tests “should not be used to make decisions about grouping persons residing in or being admitted to congregate settings, such as schools, dormitories, or correctional facilities” and also “should not be used to make decisions about returning persons to the workplace.”
Why? For one thing, many antibody tests which have been given emergency authorization during the outbreak aren’t particularly accurate. It will take time to figure out exactly which ones are. It will take even more time to figure out what the presence of these antibodies even means when it comes to immunity.
States such as Texas, South Carolina, Florida, and others have begun the reopening process, although many are still maintaining special rules such as reduced capacity and social distancing for reopened businesses (others have had a more difficult time at crowd control and enforcing public health protocols.)
In traditional office spaces, some companies will likely employ a mix of strategies. Temperature checks may become a regular part of air travel and in other businesses, for instance. Even that might come with some problems since the novel coronavirus has a weeks-long incubation period, meaning you may not have symptoms such as a fever despite being infected.
Distancing within enclosed spaces may very well become a norm. And at some companies, like pharmaceutical giant Bristol-Myers Squibb, the employees who are still expected to come in to manufacturing plants to make drugs have safety mechanisms in place.
“We have a mechanism for that employee to be tested, and we also have the ability to track the contacts that that person may have had in a plant to alert the people who may have been in contact with them,” Bristol-Myers CEO Giovanni Caforio told me for Fortune‘s latest print issue.
Overall, coming back into work will likely prove a multi-pronged, gradual, and complex dance for many businesses. If you have any personal stories about how your own business is grappling with the process, please shoot me a note.
Read on for the day’s news, and we’ll see you again next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Europe wants to leverage 5G to recover from COVID-19. There have been conspiracy theories abound regarding 5G and its ostensible link to COVID-19 (to be clear, there's no proof any of that is true). Ironically, 5G may actually be a critical tool in the fight to modernize digital infrastructure in the wake of widespread lockdowns that have revealed deep shortcomings in data access, my colleague David Meyer writes. “The pandemic and its consequences on our lives and economies have highlighted the importance of digitization across all areas of EU economy and society,” said European Union officials. “New technologies have kept our businesses and public services running and made sure that trade could continue flowing. They have helped us all to stay connected, to work remotely, and to support our children’s learning.” (Fortune)
INDICATIONS
Quest Diagnostics' COVID-19 test kit gets FDA emergency authorization. Lab testing giant Quest Diagnostics has won FDA emergency authorization for a coronavirus test which can be self-administered in people's homes. This isn't an antibody test—it's a nasal swab which can be used to detect an active infection. (WHBL)
Novartis gets in on the coronavirus vaccine hunt with a manufacturing boost. Yet another drug giant is joining the race for coronavirus vaccine development. Switzerland-based Novartis will join with Massachusetts General Hospital and Massachusetts Eye and Ear on its experimental vaccine with a very specific mission: to help ramp up the manufacturing capacity for the vaccine. Novartis is suited to assist since the vaccine will rely on manufacturing processes similar to those used for existing Novartis gene therapies such as the spinal muscular atrophy drug Zolgensma. (Reuters)
THE BIG PICTURE
Coronavirus cases soar past 60,000 for health care workers. New CDC figures find that more than 60,000 American health workers have contracted coronavirus and nearly 300 have died. These frontline workers are, by the nature of their jobs, susceptible even though they use medical grade protective gear. In the broader population, the U.S. crossed a grim milestone as COVID-19 deaths crossed 100,000 people. (NPR)
Just half of Americans say they'd get a coronavirus vaccine. Despite all of this grim news, a surprising number of Americans polled by The Associated Press-NORC Center for Public Affairs Research say they wouldn't (as of now) get a coronavirus vaccine should one be approved. About 20% say they wouldn't get one at all, while another 31% weren't sure. Close to half said they would get a vaccine. (Associated Press)
REQUIRED READING
More than 40 million Americans have filed for unemployment, by Lance Lambert
'No mask, no service' rule is OK for NY businesses, Cuomo says, by The Associated Press
Pandemic lockdowns pose a new risk to working moms, by Claire Zillman
How remote work may exacerbate diversity issues for companies, by Danielle Abril
Sign up for other Fortune newsletters.


fortune--2020-05-28--HBO Max hits 90,000 mobile downloads on day one, putting it behind rival services

AT&T Inc.’s big bet on its new streaming platform, HBO Max, depends on luring fresh customers who aren’t just converting from existing HBO services at the same price. It’s off to a soft start in that regard.
About 90,000 people downloaded the $15-a-month HBO Max mobile app on Wednesday, its first day, according to the measurement firm SensorTower Inc.
That number is far less than the tally for Walt Disney Co.’s Disney+, which attracted 4 million mobile users on its launch day back in November, according to SensorTower. And more than 300,000 people downloaded the short-form streaming service Quibi on its first day in April. A spokesman for AT&T’s WarnerMedia, the division that runs HBO Max, said the figure isn’t accurate but didn’t provide a different one.
Jason Kilar, chief executive officer of WarnerMedia and a former head of streaming service Hulu, said he’s happy with the HBO Max launch. “This is a unique platform in many ways, including the way it is distributed,” he said in an emailed statement. “I’ve seen this movie before and am so excited as we begin down this path engaging viewers globally with our unmatched shows and rich library.”
There are a couple of caveats to the competitors’ figures. Quibi, which ordinarily costs $5 a month, offered 90-day free trials. As many as 19 million Verizon Communications Inc. subscribers were eligible to sign up for a free year of Disney+, which usually costs $7 a month, although Disney received unspecified wholesale revenue from Verizon for those customers.
Read more: Quibi revamps its programming after a rocky start
The SensorTower data on HBO Max isn’t complete, since it focuses only on mobile-app downloads and excludes other ways that people can get the service, such as through a cable provider. It also doesn’t count people who got a free upgrade to HBO Max from the previous streaming app HBO Now, which had the same monthly fee.
WarnerMedia also ran a promotion in the weeks leading up to the launch, offering a year of HBO Max for $12 a month to people who downloaded the app in advance. Those signups also aren’t reflected in the SensorTower data, the WarnerMedia spokesman said.
HBO Max is still racing to sign distribution deals. WarnerMedia announced Wednesday that it had an agreement with Comcast Corp., the largest broadband provider. HBO Max still isn’t available on home-streaming devices from Roku Inc. and Amazon.com Inc.
HBO Max arrived late to the streaming game, following the recent arrivals of Disney+, Apple Inc.’s Apple TV+, Comcast’s Peacock and Quibi. And at $15, it entered a crowded market as the most expensive service — just as a recession is causing many people to curtail their spending.
Still, it benefits from the name recognition of HBO, whose shows also appear on HBO Max. And the service is stocked with a massive library of 10,000 hours of programming, including reruns of sitcoms like “Friends” and “The Big Bang Theory.”


fortune--2020-05-28--The window to use PPP loans begins to close this week—but big issues remain unresolved

As the window for some small businesses to use funds from Paycheck Protection Program (PPP) loans is starting to close—the first loans’ eight-week forgiveness period will be up at the end of this week—new interim rules issued by the Treasury and Small Business Administration (SBA) still leave plenty of questions up in the air.
The new guidance—in the form of two final interim rules issued after 10 p.m. ET on the Friday before Memorial Day weekend—clarifies and further outlines the recently released forgiveness application, parts of which have caused some confusion.
For those like Nate Whitehouse, cofounder of craft cocktail company Drifter Spirits, the shifting guidance for the PPP loan (which his company received on May 1) has been “confusing,” and the forgiveness process now looms for his business—which has effectively been stopped in its tracks by shutdowns. Drifter Spirits employees go “door to door” to pitch their brands to restaurants, bars, and hotels, and with shutdowns in place, business has just about dried up.
The new guidance issued Friday didn’t change rules that businesses must spend 75% on payroll, or the time frame (eight weeks) to use funds—a frustration for those like Whitehouse. “Our market is still not reopened. It’s put us in a position where we’re able to help keep some of our employees, but they can’t really do anything either or their normal jobs,” he tells Fortune.
Questions remain
The new interim rules released Friday (one for lenders and borrowers and the other addressing more specific line items on the forgiveness application) did clarify several points, but failed to fully answer who is actually eligible for loans as well as several points about getting full forgiveness.
While loans of more than $2 million were specifically targeted for review, the SBA noted in the new rules that loans “of any size…at any time in SBA’s discretion” could be reviewed and set up detailed processes for how the SBA would review loans. Other provisions in the new rules built on the ability of businesses to avoid having forgiveness reduced if they documented an attempt to rehire employees, but noted that businesses must now alert state unemployment offices if the employees declined to return to work.
Yet among other questions, Eric Mitzenmacher, partner at law firm Mayer Brown, points out that the new guidance seems to create “possible issues around the extended time frame” for the SBA to make “decisions, [which] might languish for a period of time that could be up to 150 days after the lender obtained the completed forgiveness application.” The issue might need more clarity, he notes, but the flexibility in the timeline for reviewing loans might push some decisions about forgiveness out beyond the six-month deferral window for repaying the loan—creating some “questions about how lenders and borrowers should handle repayment.” The new rules also state borrowers would be given the chance to appeal the SBA’s determination that they were ineligible, but said there would be further guidance on that later. An SBA spokesperson did not specify when further guidelines would be issued, but said the SBA and Treasury will continue providing guidance to lenders and borrowers.
A big pain point for many small businesses in recent weeks has been whether or not they are eligible for the loans based on certification of economic necessity. After news broke that dozens of publicly traded companies and large chains had received funds, new guidance was issued that confused many borrowers about their eligibility for the loans if they had access to other sources of liquidity.
The new PPP interim rules do not provide any further clarity about eligibility. “We still need guidance on ‘adequate liquidity,’ whatever that means,” argues Glen Birnbaum, CPA at Heinold Banwart based in Illinois. The rules note that any loan is subject to review at any time—potentially up to six years after a loan is forgiven or repaid, lawyers believe (that’s how long borrowers are required to keep documents relating to their loan, the new rules said).
While Mayer Brown’s Mitzenmacher doesn’t anticipate that will be a huge concern for most businesses (he expects reviews will likely take place prior to forgiveness), the SBA has established the authority to conduct reviews down the road, when many businesses may be “forging ahead, thinking they have an answer [about forgiveness],” he says. “And later, a year or two, three, down the road, while they’re still trying to recover from this, [they’re] hit with a claim from the government and either need to pay that directly or need to defend themselves.”
And while firms like Drifter Spirits say they are comfortable that they’ve met eligibility requirements, “in an uncertain regulatory environment like this, there’s always concern,” says Whitehouse. To stay afloat, the business has tried to raise additional funds through an equity raise and online crowdfunding: “We’re raising $500 here, $1,000 [there] from a buddy or relatives or somebody who found it online,” says Whitehouse.
But the new interim rules “unfortunately didn’t provide any additional clarity around eligibility. The existing confusion over the economic necessity certification and other issues remains,” Andrew Kugler, a partner at Mayer Brown, says.
Smaller questions
Some smaller questions center more specifically on whether sole proprietors and other businesses might be able to even get full forgiveness without rounding payroll figures to meet the full 75% payroll cap, and others like Birnbaum point out there is still confusion around some payroll issues for “owner employees” of an S corp.
Meanwhile, lenders may have their own set of concerns. As part of the new rules released Friday, if the SBA determines a borrower was ineligible, the lender that originated that loan won’t get its processing fee—a possibly challenging situation for some lenders who followed SBA rules for determining eligibility, but “incurred costs [or] potentially diverted resources from other operations in order to essentially do a public service, and through no fault of [their] own, is now uncompensated for that activity,” notes Mitzenmacher. The Independent Community Bankers of America wrote in a letter sent to policymakers Wednesday that the new rules issued Friday were “more than a source of disappointment” and that they “[open] up a new source of liability risk for community bankers who have acted in good faith.”
Despite lingering questions, CPAs and lawyers did cheer several additions, such as allowing businesses to include hazard pay and bonuses in eligibility; more guidance on how to calculate full-time equivalent employees; examples of how incurring or paying utilities (which include electricity, gas, water, transportation, telephone, or Internet) should be more flexible time-wise; and further flexibility around when businesses can choose to start their coverage based on an alternative pay period.
“There was some loosening of things, but in general, the things that have been really bothering borrowers, and are the subject of a lot of discussion in Congress, remain the same,” Kugler points out. “The big issues are still unresolved.”
Yet small businesses may be getting a few more answers to those lingering questions—not from the SBA but from Congress. Both the House and the Senate have proposed separate bills to amend various aspects of the program, centered on extending the time frame in which businesses have to use the funds (various periods have been proposed, from 16 weeks to 24 weeks) and altering the 75/25 rule on how businesses must allocate payroll versus non-payroll expenses. On Thursday, the House nearly unanimously passed a bill to amend aspects of the program, but it still faces passage in the Senate.
In the meantime, lawyers are advising their clients to prepare as much documentation as they can with the rules they have to go on right now. “Plan for no changes to the program; figure out ways to maximize forgiveness assuming nothing changes,” advises Mayer Brown’s Kugler. And then he adds, but be “able to quickly pivot if the rules do change.”
Update, May 29: This article has been updated with a comment from the Small Business Administration.
More must-read finance coverage from Fortune:
—Saving lives vs. saving the economy is a false tradeoff, economists say
—Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs
—17% of unemployed workers aren’t looking for work—and that’s warping the official unemployment rate
—Does Apple’s stock buyback strategy make sense in this market?
—Goldman Sachs doubts there will be a Round 3 of PPP loans for small businesses
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: Why banks were ready for the financial impact of the coronavirus
Subscribe to How to Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic.


fortune--2020-05-28--It’s official: English Premier League sets return date in June

The English Premier League, the world’s most-watched sports league, set a provisional restart date in June for its coronavirus-interrupted season.
In a statement Wednesday, the soccer league confirmed its intention to return on June 17 with a match between clubs Aston Villa and Sheffield United, as well as a high-profile clash between league standouts Manchester City and Arsenal. A full game week involving the remainder of the league’s 20 teams would then commence the weekend of Friday, June 19.
The matches would be played behind closed doors with no fans in an effort to maintain social distancing. Germany’s top soccer league, Bundesliga, implemented the same policy when it restarted its season earlier this month.
The Premier League is just about three-quarters into the 2019–20 season, with 92 total games spread across the league remaining. Premier League shareholders approved a proposal that will see each of these matches broadcast live in the U.K. by the league’s existing broadcast partners: Sky Sports, BT Sport, BBC Sport, and Amazon Prime. (Fortune has reached out to NBCUniversal, which broadcasts games in the U.S. via the NBC Sports Network, for comment on its broadcast plans.)
In a statement, Premier League chief executive Richard Masters stressed that the June 17 return date remains provisional. “This date cannot be confirmed until we have met all the safety requirements needed, as the health and welfare of all participants and supporters is our priority,” Masters said.
The tentative return adds to a building movement of sports leagues aiming to relaunch following worldwide lockdowns implemented to curb the spread of COVID-19. In the U.S., the NHL recently announced plans to return for a tournament-style playoff starting no later than July 1. Meanwhile, the NBA is in talks with Disney to restart its season at the ESPN Wide World of Sports Complex in Orlando in July.


fortune--2020-05-28--‘No mask, no service’ rule is OK for New York businesses, Cuomo says

Business owners in New York will be able to deny entry to people not wearing masks or face coverings, Gov. Andrew Cuomo said Thursday.
The promised executive order from Cuomo comes as restrictions on shops are beginning to loosen around the state, though not yet in New York City.
“We’re giving the store owners the right to say, ‘If you’re not wearing a mask, you can’t come in.’” Cuomo said at his daily briefing. “That store owner has a right to protect themselves. That store owner has a right to protect the other patrons in that store.”
Cuomo said his new order will reduce conflicts between shop owners and customers who refuse to cover their faces.
The immediate effect of the order is unclear. Many stores already require patrons to wear masks.
Face coverings are already required in New York when people are out in public and near others.


fortune--2020-05-28--The Coronavirus Economy: Tia’s CEO on running a women’s health clinic during a pandemic

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Before cofounding Tia, a health care startup with gynecology, primary care, and wellness services, Carolyn Witte was working at Google’s Creative Lab, a design-thinking arm of the Silicon Valley giant. Based in New York City, Witte describes the group as the “translational bridge” between the tech side of the company and “real human-in-the-world needs.” It was there, she says, that she learned the power of user-centric design, storytelling, and the “special flavor of innovation inherent to interdisciplinary teams that would become the heart of Tia’s collaborative company culture.”
Aside from her own experiences as a patient, Witte admits she was very much a health care “outsider” but saw the opportunity to apply the playbook she had learned at the Creative Lab to a problem about which she felt personally and cared deeply. So she took the plunge: She quit her job at Google, moved to San Francisco, moved in with her best friend from college (and now cofounder), Felicity Yost, and started developing Tia from their dining room table in 2016. Six months later, Yost—who had her own share of subpar women’s health care experiences and a passion for using data to personalize health care—quit her job as a product manager at a data startup.
Fast-forward to the present, after already raising $2.5 million in previous seed rounds, Tia Clinic is now announcing a new round of fundraising and a new board member joining their all-female board of directors. And after shuttering its physical doors but developing its telehealth resources, the clinic plans to reopen for in-person appointments on June 1.
Fortune spoke with cofounder and CEO Carolyn Witte for a new series, The Coronavirus Economy, to ask about how the outbreak has affected her business and her thoughts on the future and to get a sense of how she has been handling this news, both emotionally and financially.
Carolyn Witte (right) started Tia Clinic with her best friend from college (and now cofounder), Felicity Yost. Bridget Badore
The following interview has been lightly edited and condensed for clarity.
Fortune: What inspired the launch of Tia Clinic? What did it take to launch the business?
Witte: The initial idea for Tia came from my own experience struggling to navigate the health care system while going through a three-year-long polycystic ovary syndrome (PCOS) diagnosis process in my early twenties. I got fed up with a health care system that was fragmented and difficult to navigate, lacked personalization and made you feel like a number, and was overly focused on treating sickness instead of preventing it. Coming out of this experience, I asked myself: “If I can’t navigate this health care system, what woman can?” and started to envision what a whole new system might be like, designed for women’s needs at the heart of it.
Before getting into the world of clinical delivery, we built a chat-based Q&A app designed to give women personalized, evidence-based answers to health care questions like “I missed my birth control pill—what do I do?” We had a knack for building a highly intimate and trusted relationship with women, and within months, had more than 200,000 one-on-one conversations with women about all aspects of their health—not just reproductive health.
Most interestingly, we found women bringing the Tia app with them to the doctor’s office and messaging us in a care context. In the waiting room: “Hey, Tia, why do I have a deductible, can you explain?” In the exam room: “Which IUD should I get?” And post-appointment: “Tia, can you explain my test results?” Through these real-women conversations, we got a front-row seat to everything that was working and not working in health care today, validated that our poor experiences as patients were not the exception, but the norm, and quickly learned that to really change health care in the way that we wanted, we had to become the doctor. This is what led us to bet our business—literally and physically—on opening the first real-world Tia Clinic—a totally reimagined modern medical home for women that fused gynecology, primary care, and evidence-based wellness practices into a singular, integrative model.
While we did not start out as health care founders, over the past three years of building Tia, Felicity and I have become health care founders. But it’s been an uphill battle to get here: Our vision is both capital- and operationally intensive; it requires investment in real estate, doctors, and technology—and all at the same time. For this reason, we’ve been told many times through the highs and lows of this journey that we have “three strikes” working against us. One, we are first-time founders building a highly complex, capital-intensive business. Two, we are not doctors and have no prior experience working in health care. Three, we are women.
Despite these cards stacked against us, we persisted. Through every rejection, obstacle, and setback, we relied on our conviction, and above all else, the validation we got from real women in the world who wanted what we were building and didn’t “like” Tia, but loved it. Three years in, we no longer have just a starry-eyed vision but data to back up that the “Tia way” really, really works—and has the legs to scale. With a consistent patient Net Promoter Score (NPS) of 95 and a collaborative care model that reduces the cost of care by 40% per service, we’ve shown that Tia’s secret sauce is more than an Instagrammable waiting room. Rather, it is our fusion of technology, experience design, and best-in-class clinical research and practice that gives us a differentiated playbook for higher quality at lower costs and is what enabled us to secure this Series A financing, and with it, the opportunity to make the Tia Way, the new standard of care for women everywhere.
Witte sees Tia’s “fusion of technology, experience design, and best-in-class clinical research and practice that gives us a differentiated playbook for higher quality at lower costs.” Kezi Ban—Blonde Artists/Courtesy Rockwell Group
How did COVID-19 initially affect your business? What instigated the move to close your doors? Was telemedicine an option for patients in the interim?
As a health care provider responsible for 3,000 female lives in New York City at the epicenter of the epidemic, the impact of COVID-19 was a stress-test on our business, our care model, and our values. Unlike a restaurant or a yoga studio, Tia is deemed an essential service, so we did not have to close, but we made the choice to temporarily close our physical doors for the betterment of patient safety, provider safety, and an NYC health care system with limited resources, e.g., personal protective equipment.
Instead, we focused our resources on expanding Tia’s Connected Care platform to include virtual care—specifically video visits—which had historically been stymied due to regulatory and insurance reimbursement constraints. With [the easing] in telehealth regulation, we seized the opportunity to roll out a robust virtual care product, which includes the ability for patients to use their health insurance for virtual services, setting us apart from the majority of direct-to-consumer telehealth companies that are cash-only or dependent on an employer-sponsored benefit. We introduced virtual COVID screenings, antibody testing, and 48 different gynecology and primary care appointment types, all via video. Lastly, in response to a 400% increase in behavioral health–related messages we saw on our platform, we accelerated the rollout of virtual behavioral health, which filled immediately and has remained 100% booked for the past four weeks.
Since COVID began, more than 40% of Tia’s patients have used Tia’s virtual care offering via chat or video, and our already standout NPS of 95 rose to 100 week-over-week during COVID—a testament to the role we’ve played for women in NYC as both care providers and their trusted source for information during the epidemic.
Now that you’re on the way to reopening, what should patients know when returning? What steps have you taken to ensure patients will be as safe and secure as possible when visiting the clinic?
On June 1, we are reopening the physical Tia Clinic and will be offering integrated in-clinic and virtual women’s health care. Just as closing our doors was a deliberate choice in service of patient safety, so is our decision to reopen them. Women’s health is an essential service. Delaying services that cannot be done on the Internet—such as a pelvic exam, an IUD insertion, or an endometrial biopsy—for 30 days is one thing, but delaying these types of essential services for a longer period of time puts women’s health at risk. Moreover, with lower rates of new infections in NYC and expanded access to PPE, we are now able to provide the essential health care services to our patients while mitigating the risks to our care team.
To maximize patient safety, we will continue to deliver the bulk of services virtually and only bring patients in for services that require in-person care. To prevent any exposure for our patients and staff, all COVID-related concerns are being handled virtually versus at the clinic. All patients coming into the clinic will answer a pre-visit health screening via text to assess any potential symptoms before they even show up. All check-in for appointments will be “touch-less” and done 100% virtually prior to showing up at the clinic.
We are maintaining strict social distancing by limiting the elevator to one person at a time, spacing out seating in our living room, and staggering appointments. Upon arrival, every patient will receive a mask, be given a temperature check, and be asked to wash their hands. We are keeping the Tia Clinic extra clean, by disinfecting all counter surfaces and medical equipment after each patient, throughout the day, and cleaning each evening with EPA-approved products.
Last but not least, we are screening all Tia staff members daily, testing them regularly for COVID-19, and providing personal protective gear for respiratory and contact precautions.
You just completed a new round of fundraising. How much did you raise, and what is the valuation of the company now? How difficult is that effort to undertake given the turbulent economic climate?
We raised a $24.275 million Series A fundraise, led by Threshold Ventures with participation from Define Ventures, ACME, Torch Capital, John Doerr, Homebrew, and Compound. I’m proud to say that it is the largest Series A financing led by a female CEO in 2020.
In addition to new capital, we are thrilled to have Threshold Ventures managing partner Emily Melton join our all-female board of directors alongside Lynne Chou O’Keefe, managing partner at Define Ventures.
In normal circumstances, raising a Series A of this size is extremely difficult—especially for women, who despite getting funded more frequently over the past few years, continue to raise far less capital than male founders [only 2.9% of total VC dollars in 2019 went to women], and sell more of their companies when they do it. And we closed our Series A on March 17 on the brink of a global health crisis and economic collapse, two days before shelter-in-place was instituted in New York City, and one day after we chose to temporarily shut the physical doors of the Tia Clinic.
While COVID-19 has had short-term implications for our business with the temporary close of our physical clinic, long-term, Tia’s business and service model will be stronger for it, and our investors saw that opportunity. We are the only virtually integrated women’s health care offering of its kind, giving us a unique opportunity to connect and scale our online and offline business and service models in innovative ways for the betterment of both women’s health outcomes and the cost of care.
With a big vision, massive market opportunity, and proven playbook from the past year of operating our first Tia Clinic in NYC, we were able to give investors the conviction to make a bet—despite turbulence in the market—on Tia being a leading force that can shape “the COVID correction” our health care system desperately needs.
How do you plan to utilize the new funds? What areas of service do you plan to expand? Are there any services that patients are requesting with more urgency?
With this financing, we are seizing this opportunity to bring virtually integrated Tia Care to new markets by expanding our virtual and brick-and-mortar footprint.
We plan to broaden our scope of practice to serve women throughout their reproductive lives, inclusive of prenatal, postpartum, and obstetrical care. Additionally, following the outsized demand for Tia’s behavioral health offering, we will be doubling down on expanding this program virtually and in-clinic in NYC and in future markets.
And we plan to partner with leading health systems, employers, and provider networks to scale our Connected Care platform, and open new physical and virtual Tia doors. These strategic partnerships will help us keep the cost of care affordable by working within the existing insurance system, enable us to better connect a women’s care journey across the outpatient and inpatient world, and give our patients access to the best specialists and hospitals when their care requires it.
There was some backlash last year in regards to concerns about the clinic’s data privacy policy as well as criticism that Tia Clinic rates were prohibitive on a socioeconomic basis, the latter of which could become exponentially worse as the unemployment rate continues to surge. What steps have you taken, if any, to address these issues?
Tia has always been and remains evermore committed to raising the quality bar of women’s health care within the confines of the existing system and payment models that dictate access and costs. We charge a modest membership fee of $15 per month, the lowest-price membership-based clinic on the market. This fee covers benefits that go beyond what insurance pays for, that many women want, including unlimited messaging with your Tia Care Team, and educational and community events including Support Circles for women with chronic conditions and trauma. And most important, we work with insurance companies to ensure women can use their health insurance for all services at Tia from gynecology to primary care to acupuncture, and soon behavioral health, in-clinic and virtually.
Recognizing that a membership fee of any kind can be cost prohibitive, we introduced a membership fee waiver program earlier this year to waive membership fees for low-income women or those facing financial hardships. We have not yet seen, but expect applications for waived membership fees to increase in light of the current economic climate and will be doubling down on supporting this waived membership fee program in NYC and in all markets that we expand to later this year.
More than waiving membership fees, however, we believe the most impactful way we can increase access is by helping women get health insurance, which is the key to unlocking access to covered benefits at the Tia Clinic and at any women’s health care provider. Before COVID, one in five millennial women was uninsured; we expect this figure to increase rapidly in light of massive job losses, and with it, insurance coverage. To help solve this, Tia’s care coordination team has invested extensively in helping our patients navigate this new insurance landscape, creating insurance guides and calling your insurance company on your behalf to fight claims and charges.
On the data privacy side, we aim to give patients control when it comes to their health and data, across our free consumer-facing apps and HIPAA-compliant patient and provider apps. Most notably, we’ve built in additional layers of control and transparency to support our Cycle-Connected Care feature, which can connect (if a patient so chooses) self-reported cycle, health, and wellness data from our Tia Tracking App with their Tia Care Team.
We explicitly give Tia Clinic patients the choice to securely connect their data to care to be viewed by their Tia Provider on their Tia Visit in order to further personalize the diagnosis and treatment process. With one tap, patients can now turn on or off data-sharing with their Tia Care Team, if they so choose.
On a personal note, how have you been faring amid all this?
I’ve spent the majority of quarantine hiding out with my cofounder, Felicity, which reminds us of the early days of building Tia from our shared dining room table. I am grateful for this one-of-a-kind personal and professional partnership though this unprecedented roller coaster, the late-night whiteboarding, and decompression cooking sessions.
Through times like these, we are especially grateful for the “tunnel vision” that Tia gives us—the responsibility and opportunity to commit tirelessly to something bigger than ourselves that we hope can play some small part in the COVID correction.


fortune--2020-05-28--Why GitLab hired a ‘head of remote’ before the coronavirus pandemic

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Darren Murph lives in coastal North Carolina, a peaceful place far from Silicon Valley.
“I fought really hard for this,” says the tech executive, about being able to work where he and his wife grew up. He has been a remote employee for the past 15 years.
That makes Murph particularly well-positioned for his latest role: In July 2019, he was hired as the head of remote at GitLab, a startup that provides software for developers. If you’ve never heard of a head of remote (or of GitLab—it’s a household name only with coders), you’re not alone. Most companies don’t have one, though Murph believes that’s about to change.
Darren Murph works in his home office in North Carolina—with a little help from his toddler son. Courtesy of Darren Murph
“There’s a lot of nuance in getting this right when your team isn’t working in the same place every day,” says Murph. How do you onboard employees? How do you provide them with opportunities to network and socialize? How do you create a corporate culture without a physical office? This is what Murph spends his days dealing with—from the quiet shores of North Carolina.
If any company has a need for a head of remote, it’s GitLab. The startup, founded in 2011, employs more than 1,200 people across 65 countries and has zero company-owned offices. Its CEO and cofounder, Sid Sijbrandij, is from the Netherlands and technically lives in San Francisco. But other members of GitLab’s executive team are spread out all over the world.
“A lot of remote companies still keep their execs in an office, or in the same time zone, which creates a visible center of power that we intentionally try to avoid,” says Murph.
According to Murph, a dispersed executive team is key for a viable transition to working remotely, or taking a hybrid approach—one that allows for both remote and in-office workers. A hybrid approach is likely going to be embraced by many companies in the post-pandemic world. And while it enables flexibility, it also presents many cultural and logistical challenges. Case in point: Last week, Facebook CEO Mark Zuckerberg said that, within a decade, half of the social media giant’s employees could be remote. But will he keep working from Facebook’s sprawling, plush office in Menlo Park, Calif.? If so, the result could be a two-tier system in its employee base—those who work in the office will have more opportunities for face time with the decision makers or at least give the perception that they are closer to the powers that be.
“A company’s headquarters needs to be just a place where people can go to work remotely,” says Murph.
Unlike GitLab, companies like Facebook are being forced into accepting remote work because of the COVID-19 outbreak. “What you’re seeing now isn’t remote work,” says Murph. “It’s crisis-induced work-from-home.”
Companies that want to get remote right will need to be thoughtful and intentional about how they roll out new policies and how they change their culture. They may want to start with hiring a head of remote, someone who is devoted to the task. And if they’re not ready to make that jump, they can also just crib from Murph’s “Remote Playbook”—yes, he really did write the playbook.


fortune--2020-05-28--How ‘The Vast of Night’ aims to tell a retro sci-fi story with a fresh touch

The Vast of Night isn’t shy about referencing The Twilight Zone. In fact, the film is framed very similarly to an episode of the Rod Serling series, informing viewers that they’re being transported to the “Paradox Theater.”
But while such genre references are peppered throughout the movie—available for streaming on Amazon Prime Video on Friday—director Andrew Patterson also saw the film, his feature debut, as an opportunity to tell a familiar tale a little differently.
“I was very much obsessed with getting to play with the medium of cinema,” Patterson tells Fortune, noting that the script by James Montague and Craig W. Sanger felt similar to stage and radio plays, with elements of a modern-day podcast.
The story, set in the 1950s, focuses on two teens—switchboard operator Fay (Sierra McCormick) and radio DJ Everett (Jake Horowitz)—as they investigate a strange audio frequency detected in their small New Mexico town. The tale essentially unfolds in real time, and while it pays homage to UFO stories familiar to fans of Close Encounters of the Third Kind or The X-Files, the influence of films like All the President’s Men and Zodiac—which Patterson is open about—is also clear.
Jake Horowitz as Everett (left) and Sierra McCormick as Fay in “The Vast of Night,” which arrives on Amazon Prime Video on May 29. Amazon Studios
“As actors, we always thought of it as more of like a [Richard] Linklater movie,” says Horowitz, who was drawn to the “amazing rhythm” and “musical” qualities of the script. “It’s more a slice of life, it’s more real-time, it’s more—how would this actually happen?”
The project’s rich script and dialogue weren’t the only qualities that appealed to the actors. McCormick, whose character reminded her of her younger sister, says the role was too good to pass up.
“Characters like Fay for actresses just don’t come along all that often,” says McCormick, who notes that she is a “nuanced real kind of female character that…has this wonderful arc throughout the movie, where in the beginning she is more hesitant to assert herself in situations, she’s more timid, she’s more self-conscious maybe about taking charge in situations, and then by the end of the film, she’s taking charge, she’s asserting herself, she’s bossing Everett around, she’s leading this adventure.”
The production design team worked hard to give the film a true ’50s quality—Patterson says this is evident in the smallest details, such as characters’ watches and glasses, as well as the technology seen on-screen. When they weren’t actively shooting the film, Horowitz says he played around with reel-to-reel tape recorders in his hotel room. McCormick, who looked up footage from the era on YouTube, had a switchboard to practice with, which she did repeatedly until she captured the quick flick-of-the-wrist movement she noticed in old videos.
“I wanted to make sure it…looked authentic, and it didn’t look like I was an actress from the 2000s fumbling through this crazy technology,” she says.
McCormick practiced how to use a switchboard to get in character as Fay. Amazon Studios
Part of the film’s atmosphere is established by the fact that it was shot at night. But this also presented challenges. “When you shoot at night, you have to light everything. There isn’t any available opportunity for you to just turn the camera on,” says Patterson, who notes that the team had to work quickly within the constraints of when the sun rose and set, eventually wrapping up the shoot after 17 days. “Anytime we had to pick up and relocate or move the shoot even just 10 or 15 feet, we lost a lot of time.”
That made for some tension when Horowitz shot a key radio station scene.
“They did it about six times, and it sort of ends on me,” he says, adding that he was more concerned than usual about making a mistake. “This incredible long shot was ending on me and it was pretty simple. I just have to stand there, smoke a cigarette, then pick up a phone. But the pressure of doing that at five in the morning, after they have spent six hours lighting this whole street, that was pretty intense.”
Many of the movie’s scenes involve long takes of dialogue—including one with a radio station caller who isn’t seen on-screen, and the viewer rarely gets to witness a moment without one or both of the main characters in the frame. The one time this changes is during a particularly long take about half an hour into the film, when the audience gets a sweeping view of what’s happening across the town. Patterson says this was an “intentional point in the movie” meant to highlight how the main characters were isolated from others in their town, while also allowing for a change in pace.
“We know that the viewer gets used to the pace and the rhythm of what you’re doing,” he says. “Everything eventually gets clocked and tracked by a viewer, and if you aren’t evolving ahead of them, your movie will stop being interesting.
“We knew we needed to change from the location we were at and we needed to do it in an invigorating, exciting way.”
The film was shot during the fall of 2016, with Patterson spending a couple of years on production before it could hit the film festival circuit. It’s coming out now on Amazon Prime Video, after playing at select drive-in theaters the weekend of May 15, a release strategy tied to the ongoing coronavirus pandemic.
Horowitz and McCormick are both upbeat about how the film has rolled out to audiences. “The idea that we would not have released this in drive-ins now seems crazy,” says Horowitz, adding that there’s also a huge audience for the movie on the streaming side, with many people inside all the time.
McCormick agrees with both assessments. She also had a chance to catch the movie at a drive-in theater in California; hearing the audio through the car radio made certain scenes in the film feel even more true to the story, she says.
“The drive-in atmosphere and that sort of way of viewing just really lends itself to the whimsy of the film and the nostalgia and the time period,” she says.
Meanwhile, Patterson admits that it’s been a “little disheartening” that the movie didn’t get a chance to make it to “hundreds of screens.”
“But at the same time, with as many movies getting pulled and relocated and shifted around, and release dates getting moved around, I think we may get more attention than we would have otherwise,” he says. “So that’s the silver lining in our situation.”
The Vast of Night will be available on Amazon Prime Video May 29.


fortune--2020-05-28--To recover from COVID-19, Europe wants more 5G

Conspiracy theorists may absurdly claim that 5G is somehow behind the spread of the novel coronavirus. But as far as the European Union is concerned, the mobile technology will prove a vital part of the cure that will help the bloc recover from the widespread economic destruction caused by the pandemic.
When it proposed a 750 billion euro ($826 billion) recovery package on Wednesday, the European Commission said it would “press fast-forward” on the EU’s digital transition.
“The pandemic and its consequences on our lives and economies have highlighted the importance of digitization across all areas of EU economy and society,” the EU executive branch said. “New technologies have kept our businesses and public services running and made sure that trade could continue flowing. They have helped us all to stay connected, to work remotely, and to support our children’s learning.”
That means investment in more and better connectivity, starting with 5G. Not only will the new technology provide the bandwidth required by health, education, logistics, and other sectors, the commission said, but it will also “increase Europe’s strategic autonomy.”
Running with the same theme, the commission also said it would move to ensure Europe wasn’t so dependent on other countries for strategic parts of the digital supply chain. So get ready for recovery grants to be steered toward not only 5G networks—and “6G networks,” although 6G is not actually a thing yet—but also fields such as artificial intelligence, cloud infrastructure, and secured communications.
These are areas the commission was already intending to push, but now it sees them as more urgent, because of their strategic importance to the economic recovery process. The same goes for the other big area where the commission is pressing fast-forward: Europe’s green-tech transition.
On the green front, the plan is to create new jobs through the shift to cleaner energy—and, again, to reduce the EU’s dependence on external fuel suppliers.
“We can now lay the cornerstone for a union which is climate neutral, digital, and more resilient than ever before,” said European Commission President Ursula von der Leyen as she presented the proposals to the European Parliament, which will—along with the EU’s member states—need to approve the package before it becomes reality.
That approval will follow a series of negotiations that are likely to continue through much of the year. Some serious disagreements remain unresolved, not least of which is the opposition by four countries—Austria, the Netherlands, Denmark, and Sweden—to the idea of disbursing grants to countries. These “Frugal Four” nations would prefer to see loans with conditions attached, whereas France and Germany favor unconditional grants. The commission’s proposal is an attempt to find a middle path—mostly grants with some loans—but as a Dutch diplomat told Politico, “It’s difficult to imagine this proposal will be the end state of [the looming] negotiations.”
Even then, Deutsche Bank analysts noted in a Thursday research report, it is “less than clear” that the recovery plan and the EU’s longer-term green and digital targets “can easily be streamlined,” particularly as the targets “require substantial economic restructuring.”
“Knowing that it would be a formidable task to find consensus between 27 members with strongly diverging views and interests, many aspects have been left vague and open for the upcoming negotiations,” the analysts wrote.
5G, which promises blazing fast mobile Internet speeds and the ability to connect billions of “smart” devices, has been deployed across 10 European countries, and is seen by policymakers as an important technology to make economies more competitive. In 2016, the commission set a 2025 target for achieving “uninterrupted coverage of all urban areas and major terrestrial transport paths.”
The telecom industry was quick to respond to the commission’s proposal with specifics. Also on Thursday, the European Telecommunications Network Operators’ Association (ETNO) issued a paper calling on the commission to ease the rollout of 5G networks by exempting parts of those networks from the permit process and reducing the taxes and fees that some countries charge operators.
ETNO also pointed out that the coronavirus pandemic had actually delayed some of the radio-spectrum auctions that are needed to free up frequencies for 5G: The auctions are delayed in countries including Spain, Austria, Portugal, Poland, and Czechia.
The trade group argued that the commission should try to better coordinate the spectrum-allocation process, to “facilitate both operators and societies through the crisis.” It also called on the commission to ease competition rules to enable operators to collaborate more on network rollouts.


fortune--2020-05-28--Silver Lake wants to make travel deals happen

The coronavirus has left many travel and retail deals out to dry. Now Silver Lake is trying to save one while making yet another bet on travel’s comeback.
The tech-focused private equity firm, which has made high-profile bets in Airbnb and Expedia in recent months, is pushing for a deal to take public Global Blue, a company that provides tax refunds to tourists.
In January, Far Point Acquisition announced plans to acquire Global Blue for $2.6 billion and take it public. But it reversed course earlier this month as the pandemic raged on, saying management believed the combined company would lack sufficient liquidity. Global Blue, though, was undeterred, saying it would continue to pursue the combination that had attracted a $1 billion investment from Alibaba founder Jack Ma.
Silver Lake is flying straight into the turmoil. The private equity giant is urging for a merger with some concessions to sweeten the deal for Far Point’s shareholders after taking a 12% stake in the blank check company for about $100 million, Silver Lake revealed in a Wednesday filing. Silver Lake is now the blank-check company’s largest shareholder outside of hedge fund Third Point.
“COVID-19 is having more of a short-term impact on GB’s industries than prior downturns,” read Silver Lake’s letter to Far Point’s board of directors.
As part of its plan to convince Far Point shareholders of the deal, Silver Lake has offered to forgo its $168 million in cash dividends in favor of common stock, a move that reduces the transaction costs of the deal. It also offered to boost the value of warrants following the deal’s close.
Will Global Blue get its wish? Silver Lake’s deal will need to be sweet enough that another 13.1% of Far Point shareholders think the acquisition is worth it. A combination requires 50.1% of shareholders to agree—and so far, with Silver Lake and Third Point’s support, the deal has about 37% support.
Buy the shovel: Card issuing startup Marqeta more than doubled its valuation to $4.3 billion after raising $150 million from a U.S.-based institutional investor, the company said Thursday.
The raise is an extension to its Series E raise of $260 million led by Coatue Management a year earlier, meaning the terms of the deal are the same aside from the valuation bump, CEO Jason Gardner tells Term Sheet. Gardner declined to name the investor in Marqeta’s most recent round.
The startup—which helps the likes of DoorDash, Uber, Square, and Brex build out their own card offerings—has benefited from the boom in companies of all stripes diving into financial services. And while the coronavirus has hurt its revenues from sources like corporate spending and travel (a vertical in which fintech darling Brex operates), food delivery and buy-now-pay-later demand (think Klarna, another Marqeta client) has helped push the company to record volumes in March, April, and May, Gardner says. The company plans to expand further, and internationally, with the fresh funding.
For many investors, Marqeta was among the candidates for an IPO in 2020. An employee asked as much about the timing of a potential public offering of the nearly 10-year-old company in an all-hands on Wednesday. Gardner was coy and declined to give a timeline.
“The IPO window is closed and this year was going to be the year of the IPO,” he says, adding that Marqeta was not previously planning to go public in 2020.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Pie Insurance, a Washington D.C.-based insurtech focused on worker’s compensation, raised $127 million in funding. The deal includes $27 million in extended Series B as well as $100 million for Pie Carrier Holdings, a joint venture with Gallatin Point Capital.
- Synack, a Redwood City, Calif.-based security testing platform, raised $52 million in Series D funding. B Capital Group and C5 Capital co-led the round and were joined by investors including GGV Capital, GV, Hewlett Packard Enterprise, Icon Ventures, Intel Capital, Kleiner Perkins, M12 and Singtel Innov8. Read more.
- Ascus Biosciences, a San Diego, Calif.-based deep science animal health and nutrition company, raised $46 million in Series B funding. Temasek led the round, and was joined by investors including Anterra Capital, Formation 8 and Cavallo Ventures.
- Q32 Bio, a Cambridge, Mass.-based biotech company developing treatments for autoimmune and inflammatory diseases, raised $46 million in Series A funding. Atlas Venture led the round and was joined by investors including OrbiMed Advisors, Abingworth, Sanofi Ventures, and University of Colorado and Children’s Hospital Colorado Center for Innovation.
- Decibel, a Boston and London-based digital experience analytics company, raised $40 million in Series B funding. Investors include Perwyn, Draper Esprit, Eight Roads Ventures and John Simon.
- Monte Rosa Therapeutics, a Dublin-based company focused on protein degradation, raised $32.5 million in funding from investors Versant Ventures and New Enterprise Associates.
- Wasabi, a Boston-based cloud storage company, raised $30 million in funding led by Forestay Capital.
- Gatsby, a Berkeley, Calif.-based web development platform, raised $28 million in Series B funding. Index Ventures led the round, and was joined by investors including CRV and Trinity Ventures.
- Dishcraft Robotics, a San Carlos, Calif.-based provider of a dishware delivery service, raised $20 million in Series A1 funding. Grit Ventures led the round, and was joined by investors including First Round Capital, Baseline Ventures, Fuel Capital, and Lemnos.
- Bright.md, a Portland, Ore.-based healthcare automation company, raised $16.7 million in Series C funding. B Capital, Seven Peaks Ventures and Concord Health Partners co-led the round.
- D-ID, an Israeli tech startup addressing privacy, raised $13.5 million in a Series A funding. AXA Venture Partners led the round and was joined by investors including Y-Combinator, AI Alliance, Hyundai Motor Company, Pitango Venture Capital, OMRON Ventures, Maverick Ventures, Mindset Ventures and Redds Capital. Read more.
- CaptivateIQ, a sales commission automation company, raised $13 million in Series A funding led by Sequoia.
- Almanac, a San Francisco-based cloud-based platform for open-source docs, raised $9 million in seed funding. Floodgate led the round.
- Meniga, a provider of digital banking technology, raised €8.5 million in funding from Groupe BPCE, Grupo Crédito Agrícola, and UniCredit.
- Tugboat Logic, a Burlingame, Calif.-based provider of a virtual security officer platform, raised $8 million in funding. Inovia Capital led the round.
- Rowdy Mermaid Kombucha, a Boulder, Colo.-based beverage company, raised $3.5 million in additional Series A funding. KarpReilly led the investment.
- Census, a San Francisco-based company syncs organizations’ data warehouses with apps and tools, raised $4.3 million in seed funding. Andreessen Horowitz led the round and was joined by investors including SV Angel, Adam Gross (ex-CEO of Heroku), Ryan Petersen (CEO of Flexport), Fritz Lanman (CEO of ClassPass), Alex MacCaw (CEO of Clearbit), and Max Mullen (Co-Founder of Instacart).
- Toro, a San Francisco-based data quality monitoring solution, raised $4 million in seed funding. Costanoa Ventures and Point72 Ventures co-led the round, and was joined by investors including Head of Data at Uber Jai Ranganathan, and head of machine learning platform for Uber's self-driving arm, Yu Guo.
- Stork Club, a San Francisco-based maternity care platform, raised $2.7 million in seed funding from Bowery Capital, Slow Ventures, Arianna Simpson (Partner at Andreessen Horowitz) and Kevin Mahaffey (Co-founder of Lookout).
PRIVATE EQUITY
- KKR committed $1 billion to form Global Technical Realty, a data center platform in Europe.
- Goldfinch Partners invested $125 million in payments fraud detection company Vesta, a Lake Oswego, Ore.-based payments fraud detection company.
- Partnerize, a portfolio company of Accel-KKR, acquired BrandVerity, a Seattle-based SaaS provider of brand protection solutions for businesses. Financial terms weren't disclosed.
- Sunstone Partners invested in Med Tech Solutions, a healthcare information technology company.
OTHERS
- Coinbase agreed to acquire Tagomi, a cryptocurrency brokerage platform targeted at professionals and institutional investors. Financial terms weren't disclosed. Read more.
- Apple acquired Inductiv, an Ontario-based AI company, to work on Siri and machine learning initiatives. Financial terms weren't disclosed. Read more.
- A unit of Ola will acquire Etergo, an Amsterdam-based electric scooter company.
- FedEx Corp is close to taking a stake in Hermes, a German parcel delivery firm. Read more.
- A group of 14 investors including Shenzhen Sequoia Hanchen Equity Investment Partnership plan to invest 1.9 billion yuan ($266 million) in the semiconductor unit of Chinese electric carmaker BYD has brought in a group Read more.
IPOS
- JDE Peet’s, the Europe-based maker of packaged coffees, is set to raise 2.6 billion euros ($2.6 billion) in an IPO in Amsterdam. It has attracted buyers including George Soros’ Quantum Partners. Read more.
- ZoomInfo Technologies, a Vancouver, Wash.-based platform for sales and marketing, plans to raise $757 million in an offering of 44.5 million shares priced between $16 to $18. It posted revenue of $293 million in 2019 and loss of $78 million. TA Associates and Carlyle back the firm. It plans to list on the Nasdaq as “ZI.” Read more.
- Big Hit Entertainment, the management label of South Korean K-Pop group BTS, filed for a preliminary review of a planned initial public offering, Read more.
BANKRUPTCIES AND BREAKUPS
- The U.S. division of bakery chain Le Pain Quotidien filed for bankruptcy protection and plans to sell its business for $3 million to fast-casual restaurant operator Aurify Brands. Read more.
- Tuesday Morning Corp. a discount home-goods retailer, filed for bankruptcy protection.
- The parent company of Advantage Rent a Car filed for bankruptcy protection. Read more.
EXITS
- A consortium including Mediterrania Capital Partners acquired MetaMed, a platform of diagnostic imaging centers in Egypt, Jordan and Saudi Arabia, from Gulf Capital.
- Savant Systems agreed to acquire GE Lighting, the lighting division of GE (NYSE: GE). Financial terms weren't disclosed.
- SoftBank is exploring a sale of its stake in OsiSoft, an industrial software company. Read more.
F+FS
- Basis Vectors, which plans to acquire vertically-focused B2B Software as a Service companies, launched with a $50 million fund. Cianna Capital leads the fund.
- Race Capital, a San Francisco based early stage venture fund run by BEA systems, is raising capital. The fund is seeking to raise $125 to $150 million, per a source.
PEOPLE
- Owl Rock named new leadership for the firm’s opportunistic investing strategy: Nicole Drapkin, Managing Director at Owl Rock, and Jesse Huff, formerly of Oaktree Capital Management.


fortune--2020-05-28--American Airlines to cut 30% of management and support staff amid travel decline

American Airlines Group Inc. will cut 30% of its management and support staff, or about 5,100 jobs, as it continues to shrink operations in response to the dramatic decline in travel brought on by the coronavirus pandemic.
The carrier also plans to detail a revamped officer team as the company shrinks “for the foreseeable future,” Elise Eberwein, American’s executive vice president of people and global engagement, said in a letter to employees late Wednesday. The airline said it hopes enough management and administrative staff will volunteer to leave under a new program available through June 10 to avoid forced layoffs.
The coronavirus outbreak and subsequent travel restrictions have put airlines the world over under immense pressure. United Airlines Holdings Inc. said in early May it plans to cut at least 30% of its managerial and administrative jobs, while several carriers elsewhere have collapsed or sought bankruptcy court protection, including Latin America’s biggest this week.
“Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the cash we’ve raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits,” Eberwein wrote.
American fell 4.1% to $11.49 at 9:48 a.m. in New York. The shares have fallen 58% this year through Wednesday, the second worst performance in a Standard & Poor’s index of the five largest U.S. carriers. Only United Airlines Holdings Inc. has fallen more, with a decline of 65%.
Bankruptcy isn’t among the options American will consider, Chief Executive Officer Doug Parker said Wednesday, seeking to quell speculation that the airline could seek court protection. “Bankruptcy is failure,” he said. “We’re not going to do that.”
Other cost-saving steps include requiring management and support staff to take 50% of their vacation by Sept. 30, not allowing untaken days to roll into 2021 and canceling a short-term incentive pay plan.
About 39,000 American employees already have taken voluntary leave or early retirement, and American will offer a second round of such programs next month. The carrier already has slashed flying, parked aircraft, frozen hiring and taken other steps to reduce spending as travel demand virtually disappeared in April. The airline also has permanently pulled more than 100 mostly older planes from its fleet.
Travel demand “definitely” has improved recently, with American’s load factor, or average number of aircraft seats filled, climbing to 56% over the Memorial Day holiday from 15% in April, Parker said Wednesday. The airline is flying only 20% of its schedule compared with a year ago. Other carriers also recently commented on slight improvements in travel demand as states ease restrictions and tourist attractions begin to reopen.
The global airline industry’s total debt could balloon 28% this year to $550 billion, which includes $123 billion in financial aid from governments, the International Air Transport Association said Tuesday.
“Government aid is helping to keep the industry afloat,” IATA Director General Alexandre de Juniac said in a statement. “The next challenge will be preventing airlines from sinking under the burden of debt that the aid is creating.”


fortune--2020-05-28--The confusing, annoying debut of HBO Max

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I’m a little confused about HBO Max, the new $15-a-month streaming service from WarnerMedia, which used to be called TimeWarner, formerly the parent company of Fortune’s parent company. Are you confused now too? I’m sorry. Blame the media behemoths.
We’re all in this confusion thing together. As Fortune’s Aric Jenkins points out, HBO now has three apps: Go, Now, and Max. One is for cable subscribers, another for cord-cutters, and a third is the AT&T unit’s top-tier streaming product. (I should have mentioned: The old phone company owns WarnerMedia; read Geoff Colvin’s explainer of AT&T’s woes if you’d like to understand better.)
Anyway, when I read Wednesday that HBO Max had debuted, I was excited. It’s got new shows and an impressive library, and I already pay for HBO through Comcast. Good news: I get HBO Max for no additional charge. Bad news: While I can get it on my iPhone—the download and authentication took two minutes—it won’t work on my Roku because WarnerMedia and Roku are having one of those consumer-unfriendly clashes of the media titans over money. (What else?) I could watch HBO Max on a Chromecast, several of which I seem to have lying around. But that’s not how I stream stuff; I like to lean back, as they say in the industry, not forward. (WarnerMedia signed a last-minute deal with Comcast Wednesday, so HBO Max will be integrated into my cable box soon, but that feature wasn’t ready today.)
The business journalist in me is rather excited by all this competition. NBCUniversal’s Peacock hasn’t even started strutting yet. But the consumer in me just finds it annoying. As further validation, Edmund Lee at The New York Times published a still-not-completely-clear “handy guide” to how to view HBO Max.
I’m a bit of an HBO addict, and it’s probably the reason I haven’t agreed with my wife’s desire to cut the cord. The streaming revolution ought to have been easier.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Time is an illusion, lunchtime doubly so. I write a newsletter. Robert writes a newsletter. I come back. President Trump is still feuding with Twitter. Today's twist is a hastily drafted executive order Trump may sign that would have the Federal Communications Commission shrink the liability protection for online platforms. What will tomorrow bring? Meanwhile, Twitter applied its "Get the facts about..." link to some tweets from a Chinese government spokesman about the origins of COVID-19.
Worth every penny. The annual analysis of CEO pay from Equilar and the Associated Press came out on Wednesday and for the first time a woman was the highest paid CEO, and a woman in tech at that. The winner will not be a surprise to Data Sheet readers: Advanced Micro Devices CEO Lisa Su topped the list with total compensation valued at $58 million. The stock market value of AMD has risen from under $3 billion when she took over in 2014 to $62 billion today.
Not quite slipping the surly bonds of Earth. "Weather permitting," SpaceX was going to make history on Wednesday. But weather did not permit and Elon Musk's rocket startup will try again on Saturday to complete the first-ever commercial launch of humans into orbit.
It takes at least three weeks not to like you. There are many reasons to complain about Apple's Siri digital assistant, but Apple is on the case. On Wednesday, the company confirmed acquiring machine learning startup Inductiv, which helps A.I. apps eliminate data errors. Speaking of Apple, last week we reported rumors that the company was acquiring old TV shows for its streaming service. Now comes news that one show is the Muppets spin-off Fraggle Rock. You'll be able to watch all 96 episodes and a new reboot is coming soon. Apple also won rights to Martin Scorsese's next movie, Killers of the Flower Moon, starring Leonardo DiCaprio and Robert De Niro.
Unfollow. After many reports that Google's Android software was tracking users' locations, Arizona's Attorney General filed a lawsuit against the company on Wednesday. “When consumers try to opt out of Google’s collection of location data, the company is continuing to find misleading ways to obtain information and use it for profit,” AG Mark Brnovich told the Washington Post.
FOOD FOR THOUGHT
Anxiety, depression, and other mental-health issues are spiking. Charlotte Jee has a piece for the MIT Technology Review examining a variety of online tools and apps aimed at helping people cope. She spoke with web designer Simon Fox, who had the idea for an online course about cognitive behavioral therapy called Helpers.
But all these products tap into a tantalizing idea: getting more people to proactively look after their mental health. Fox hopes we might use the pandemic as an opportunity to further destigmatize mental health care and help build up people’s resilience. “This can be a chance to grow your own toolbox to deal with difficult things,” he says. “It’s not about not feeling things, but it’s about adapting and having more mental resources to deal with the demands you’re facing.”
IN CASE YOU MISSED IT
Bug bounty startup Synack valued at $500 million to boost ‘white hat’ hacking from home By Robert Hackett
Instagram throws influencers a lifeline with revenue sharing for IGTV ads By Kristen Bellstrom
The pandemic won’t derail the green energy transition By Eamon Barrett
What Amazon would gain by buying self-driving car startup Zoox By Jonathan Vanian
Autonomous vehicles make sense in the coronavirus. But they’re hurting By Lucinda Shen
Business critic Anand Giridharadas has a message for newly graduating MBAs By Aaron Pressman
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
Social distancing is becoming a way of life and some fashion designers are catching on. Don't miss Veronica Toppino's crazy hats or the wearable fuzzy doughnut. Stay safe out there.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-05-28--Over 40 million Americans have filed for unemployment during the pandemic—real jobless rate over 23.

Over 40 million Americans have filed for unemployment during the pandemic—real jobless rate over 23.9%

Subscribe to How To Reopen, our weekly newsletter on what it takes to reboot business in the midst of a pandemic.
More than 2.1 million Americans filed initial unemployment claims last week, according to the U.S. Department of Labor. That brings the total jobless claims since mid-March to a staggering 40.8 million.
The latest batch of 2.1 million claims are down from the 2.4 million the week prior. While the number of weekly jobless claims has dropped eight consecutive weeks since topping out at 6.9 million in April, it still marks 10 straight weeks with claims topping 2 million. Prior to the shutdown of shops, offices, and businesses across the country, weekly U.S. unemployment claims had averaged 218,000.
Another week with unemployment claims topping 2.1 million means the U.S. Bureau of Labor Statistics’ 14.7% official unemployment rate appears even more out of touch with the real jobless rate. Since mid-April—the period covered by the BLS unemployment rate—another 14.3 million Americans have claimed unemployment benefits. When those 14.3 million are added to the already 23.1 million unemployed Americans in the latest jobs reports, it brings the total jobless over 37.4 million. That would be a real unemployment rate of 23.9%, closing in on the Great Depression peak of 25.6%.
But the official unemployment rate for May—due out next week— will almost certainly be an undercount given that only out-of-work Americans who are searching for new positions are categorized as unemployed, and, therefore, part of the labor force. And many jobless workers are choosing to wait out the virus and stay-at-home order before starting their search.
The most jobless claims during the week ending May 23 were in California (212,343), New York (192,193), and Georgia (164,350). The surge in Georgia unemployment claims highlights that even states that are easing business closures—which Georgia was among the first to do—are still in economic trouble.
Those on unemployment rolls are receiving an additional $600 weekly in benefits on top of their state benefits. However, unless that additional federal money is extended, that extra $600 will stop after the end of July.


fortune--2020-05-28--Pandemic lockdowns pose a new risk to working moms: the kid-interruption gap

Good morning, Broadsheet readers! AMD’s Lisa Su tops a new list of highest-paid CEOs, Cecile Richards talks to Fortune about making sure women can vote safely in November, and we explore more data about mothers in the pandemic. Enjoy your Thursday.
– Risks of the kid-interruption gap. A new survey in the U.K. puts in stark relief the toll the pandemic is taking on mothers: Women with kids are 47% more likely than men with children to have permanently lost or quit their jobs since February. They are 14% more likely to have been furloughed.
All told, “mothers in two-parent households are only doing, on average, a third of the uninterrupted paid-work hours of fathers. Before lockdown, mothers did around 60% of the uninterrupted work hours of fathers,” according to the study of 3,500 families with two opposite-sex parents by Institute for Fiscal Studies and the UCL Institute of Education.
The burden on mothers extends beyond job losses and reduced hours. Mothers are shouldering the bulk of the time commitment of new duties related to childcare and housework. They’re dedicating 10.3 hours every day to looking after the kids—2.3 hours more than fathers. Dads are spending more time on such activities generally—double the hours they spent on childcare in 2014-2015, in fact—yet men matched women’s household output only in families where the mother had kept her job and the father had lost his.
The study also points to nuances of parents’ new at-home existence that are easily overlooked. It reveals, for instance, a sort of child-interruption gap: Moms are far more likely than dads to be interrupted during their paid working hours. Nearly half—47%—of mothers’ working hours are split between professional duties and other activities like childcare. That figure is 30% for fathers.
Those kid cameos on Zoom are cute, but the study warns that moms’ multitasking is a risk when “focused work time is important for performance.” The mom-dad imbalance on this front could “further [increase] the gender wage gap among parents.”
These statistics may not come as a surprise to parents currently homeschooling while working—or in worse cases, homeschooling while looking for a job—but they underscore how vital childcare is as nations emerge from shutdowns and economies look to recover. There will be no “normal” without reopened daycare centers and schools.
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Big bucks. For the first time since the AP began its executive pay survey nine years ago, a female chief executive tops the nationwide ranking: Advanced Micro Devices CEO Lisa Su earned $58.5 million in 2019. Fortune
- Tennis match. And speaking of pay, the world of sports has a new top earner too. Tennis star Naomi Osaka passed Serena Williams as the highest-earning female athlete. Since June 2019, Osaka took in $37.4 million to Williams's $36 million. Forbes
- Get out the vote. Cecile Richards, co-founder of Supermajority and former president of Planned Parenthood, is working to make sure women can vote safely in November. She talked to Fortune about the challenges facing women at the ballot box, including women's greater concern, compared to men's, about safety during the coronavirus pandemic: Fortune
- Historic run. Jennifer Carroll Foy is fighting to become the first black female governor in the U.S. (the 'first' that Stacey Abrams came close to achieving). The Virginia state delegate announced her campaign yesterday. She's the first black woman to run for statewide office in Virginia, and her resume includes pushing the state to ratify the Equal Rights Amendment earlier this year. Elle
MOVERS AND SHAKERS: New York Public Radio hired Chilewich chief digital officer Ayesha Ahmad as CMO.
IN CASE YOU MISSED IT
- Huawei gets a no. Chinese tech giant Huawei lost its fight yesterday to end extradition proceedings for CFO Meng Wanzhou. Meng will remain under house arrest in Canada, instead of returning to China as the company and country had fought for. Bloomberg
- Entertainment action. Actress Gabrielle Union in a Variety cover story gave her first in-depth interview about her firing from America's Got Talent. "My goal is real change—and not just on this show but for the larger parent company," Union says about her efforts to improve the NBC show's workplace. In related news: Time's Up released a guide for how businesses can lead with equity and inclusion in mind during a crisis.
- Keeping it original. Yesterday's launch of HBO Max was shepherded by Sarah Aubrey, head of original programming for the new streaming service. She is counting on experienced filmmakers to be the first to resume production as the entertainment industry emerges from its shutdown: "You need your 10,000 hours to manage this kind of situation," she says. New York Times
ON MY RADAR
Amid the pandemic, is Hong Kong facing a different kind of death? The New Yorker
How women really feel about voting for Joe Biden InStyle
I was seven months pregnant in prison. Then COVID-19 hit The Cut
PARTING WORDS
"He thought it might get a laugh. It didn’t."
-Michigan Gov. Gretchen Whitmer on her husband's "failed attempt at humor," asking if he could get their boat moved into the water sooner because he was married to the governor


fortune--2020-05-28--Women are more worried than men about the coronavirus. Cecile Richards doesn’t want that to keep fem

Women are more worried than men about the coronavirus. Cecile Richards doesn’t want that to keep female voters from the polls

Even before President Trump’s now-infamous tweet about mail-in ballots, the COVID-19 pandemic has made the question of how Americans can best vote safely this November a national concern. It’s a crucially important question, but it also risks oversimplifying the issue. What a voter needs to access and feel safe at the ballot box depends on a host of factors, including, in some cases, her gender.
Cecile Richards, former president of Planned Parenthood and cofounder of the left-leaning women’s activist organization Supermajority, has spent the past several months focused on mobilizing women for the 2020 election. And to do so, the group is first trying to mobilize women now—urging them to fight for the right to vote safely during the pandemic.
“The reason women have the right to vote is that people did risk their lives,” Richards says, referring to the protest tactics of the suffrage movement. She doesn’t want anyone to have to place him- or herself in harm’s way to get to the polls this year.
Supermajority is lobbying for early voting—intended to cut down on the sometimes crowded lines at polling places—extended absentee voting, and online voter registration. If the organization and others fighting for the same cause are successful in persuading states to increase voting accessibility, women will certainly be able to vote in greater numbers in November. If not—as is likely in states controlled by Republican governors and statehouses, which tend to agree with the President on this issue—the fight to ensure women’s voices are heard this fall will be trickier.
Women, on the whole, already face greater hurdles than men when it comes to getting to the ballot box: a grandparent getting sick, a day-care facility that closes early, or a school that’s not open. That caregiving work that so often falls to women is now some of the “most respected work in the country,” Richards says. And paid domestic caregiving is most often done by women of color, who face additional hurdles exercising their right to vote.
While Supermajority hasn’t yet polled women on their worries about the coronavirus and safety in November, Richards expects women’s general concerns about the virus to extend to their willingness to show up for the presidential election. An April survey by Gallup found that 80% of U.S. women were “very or somewhat worried” that someone in their family would be exposed to the coronavirus, compared with 68% of men. “We know women are much more concerned in general now about the health risks of COVID-19,” she says. “They’re more likely than men to be worried that someone in their family is going to be affected. It’s logical that’s going to apply to going out and standing in line to vote.”
While the cofounders of Supermajority are aligned with the Democratic Party—and while expanded voting access has traditionally been a Democratic issue—Richards emphasizes that now, more than ever, the ability to vote safely applies to everyone, regardless of party affiliation.
“It’s not a partisan issue,” she says. “There’s never been a better reason to solve this problem.”


fortune--2020-05-28--‘Shameless’: Beijing accuses U.S. of interference in Hong Kong autonomy dispute

A Chinese foreign ministry spokesperson in Hong Kong called U.S. politicians “arrogant, unreasonable, and shameless” for attempting to interfere with China’s “internal affairs” in a Thursday statement released after the National People’s Congress (NPC) approved a sweeping and controversial national security law tailored for Hong Kong.
The statement comes a day after U.S. Secretary of State Mike Pompeo told Congress that the State Department no longer considers Hong Kong autonomous from mainland China.
“The United States stands with the people of Hong Kong,” Pompeo tweeted on Wednesday, before the NPC approved the law.
The foreign ministry statement said its spokesperson “firmly opposed and refuted” Pompeo’s claim that the law threatens Hong Kong’s autonomy.
President Donald Trump said last week that the U.S. would react “very strongly” if Beijing pushed forward with the law, which allows the central government to bypass Hong Kong’s legislature and directly impose the legislation that lawmakers in China will craft in the coming weeks.
The spokesperson, a representative of the commissioner’s office of China’s foreign ministry in Hong Kong, said the new law will “secure the long-term stability of ‘one country, two systems,’” the framework separating Hong Kong’s legal, political, and financial infrastructure from that of mainland China.
The legislation has received international pushback for the leeway it seems to provide to crack down on Hong Kong’s autonomy and sparked a new round of protests in the city; last year’s months-long political unrest had quieted during the coronavirus outbreak.
“[The legislation] will not affect the high degree of autonomy of Hong Kong [or] the legal rights and freedom of Hong Kong citizens,” the ministry spokesperson said.
Nor will the legislation affect the legal rights of foreign investors in Hong Kong, the spokesperson added.
According to the 1992 U.S.-Hong Kong Policy Act, if the U.S. determines that Hong Kong is not sufficiently autonomous from mainland China, it can revoke Hong Kong’s preferential trade and economic privileges.
One worry among some experts is that the political uncertainty and Beijing’s encroachment on Hong Kong’s legal system will discourage foreign investors and companies from doing business in Hong Kong.
China’s top legislative body resoundingly approved the law, which the Hong Kong government is required to implement once lawmakers in China complete the draft. It will come into effect by September.
More must-read international coverage from Fortune:
—Inside China’s reopening: 7 personal stories of life after lockdown
—Photo essay: What life looks like in Europe as the continent starts to reopen
—Reopening of Shanghai Disneyland is a proving ground for pandemic-era theme parks
—Trump’s demand that China pay coronavirus reparations evokes an ugly history
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: The global crisis in recycling


fortune--2020-05-29--Don’t count on a recovery in global air travel before 2024, S&P says

Wall Street vs. Big Tech : Why finance is racing back to the office while tech embraces WFH

The aviation industry’s recovery from the coronavirus outbreak will be long and slow, with passenger numbers likely to stay below pre-pandemic levels through 2023, according to S&P Global Ratings, which warned of more rating downgrades for airports over the next few months.
Global air passenger numbers will drop as much as 55% this year, a far steeper slump than previously estimated, analysts including Tania Tsoneva and Julyana Yokota wrote in a report dated May 28. Any recovery will depend on factors including how governments ease travel restrictions, people’s willingness to fly again and the extent of economic damage from the outbreak, they said.
Some countries are gradually allowing flights to operate following lockdowns and restrictions on movement, but volumes remain low. Airports are struggling for business as demand for services such as dining and duty-free shopping essentially evaporated.
“Air travel will eventually return when current health and safety concerns have been meaningfully addressed by the industry and consumer confidence rebounds, supported by steady historical growth rates in air traffic of 4%-5% per year,” the analysts said. “A more widespread adoption of remote working and virtual meetings could have a lingering impact on business travel, which has been the more lucrative passenger segment for the airlines.”
S&P has already lowered its ratings on 11 airports since March and expects their financial strength to be eroded by the shutdowns, as well as an anemic recovery, capacity restructuring and greater counterparty risks of airlines.
“Airports will face increased exposure to volume risk and pressure on their aeronautical revenues, which generally represent over 50% of total revenues,” S&P said. “Retail revenues, the share of which have risen in recent years to 45%-50% of most airports’ revenue mix, will likely be even more heavily hit than aeronautical revenues.”


fortune--2020-05-29--Debating the plastics problem

Debating the plastics problem

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Since it’s Friday, some feedback.
The word “plastics” still carries the punch it did in Dustin Hoffman’s day–although for different reasons. I wrote about the plastics pollution problem this week, and got enough email to pack a landfill. A sampling:
“Thanks for spreading the awareness about plastics. It is virtually impossible to eliminate plastic from our lives, but it is relatively easy to avoid one of the biggest offenders of single use plastic—beverages. There are plenty of alternatives like aluminum, glass and paper… Will you consider taking the pledge and helping us spread the word?”
-S.H.
“Until we recognize that the global plastic ocean pollution problem isn’t largely caused in the U.S. where we have excellent trash management practices, but in other nations with poor practices where we enjoy the lower costs of those practices. How much more would be willing to pay for our iPhones made in Asia if the cost of managing the trash in the countries where they are made was incorporated into that cost?”
-C.N.
“I would like to think that the Alliance to End Plastic Waste is sincere—but believing that based on a $1.5b investment is false hope. You didn’t mention that they currently have $250b+ invested in a massive global expansion of petrochemicals for plastic production. Without any real plan for how to deal with all the single use plastic waste.”
-E.D.
And separately, Fortune is taking submissions for our annual Change the World list, which is focused on companies that have made measurable progress addressing social problems or needs. You can find past honorees here—and note that multiple companies on that list have been recognized for addressing the plastic waste problem. If you want to recommend a company, you may do so here.
News below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Twitter vs Trump
Having already put a fact-checking notice next to tweets from Donald Trump in which the president inaccurately referred to "substantial" mail-in voting fraud—a move that triggered an executive order about social network liability—Twitter has now stated that a newer Trump tweet broke its rules by glorifying violence. The tweet in question, in which Trump appears to threaten protestors with shooting, will stay up—but with a public interest notice alongside it, and people won't be able to like, reply or retweet it without a comment. Twitter: "It is important that the public still be able to see the Tweet given its relevance to ongoing matters of public importance." P.S.: Mark Zuckerberg doesn't think social networks should fact-check politicians. Fortune
ECB money printer
Economists polled by Bloomberg expect the European Central Bank to step up its emergency asset purchases next week—most think there will be a top-up of $550 billion. Pantheon Macroeconomics' Claus Vistesen: "[Updated economic projections will] crystallize the grim reality for the euro zone…The ECB will use that to further lift its asset purchases, and commit to an extension beyond December 2020.” Bloomberg
Renault cuts
Renault is looking to cut a whopping 14,600 jobs around the world, to help find $2.2 billion in savings over the next few years. Interim CEO Clotilde Delbos: "We thought too big in terms of sales." The French auto giant will cut its global production capacity from 4 million vehicles in 2024 to 3.3 million, and will focus on electric vehicles and small vans. BBC
Hong Kong
Hong Kong's pro-Beijing government has told the U.S. to keep out of the debate over the imposition of Chinese national security legislation on Hong Kong. If the U.S. rescinds the financial hub's special economic status, the government warned, the move could backfire on the U.S. economy. "Any sanctions are a double-edged sword that will not only harm the interests of Hong Kong but also significantly those of the U.S.," it said. President Trump is due to announce his response to the extension of the Chinese law later today. Reuters
AROUND THE WATER COOLER
Musk payout
Elon Musk has received the first of his incentive-based stock option payouts, worth around $775 million at Tesla's current share price. This initial tranche is a reward for keeping Tesla's market cap at $100 billion on a 30-day and six-month trailing average. Musk's stake in his company is now at 20.8%. CNBC
Dollar stores
Dollar stores are doing pretty well in the pandemic, despite having no big e-commerce operations. Why? Partly their presence in markets too small to support a Walmart or Target. GlobalData Retail MD Neil Saunders: "This ‘localness’ was a major advantage during the crisis when many households were reluctant to travel too far, and some were nervous about visiting big-box stores where it is very difficult to reduce dwell time." Fortune
Bypassing retailers
PepsiCo and Kraft Heinz are among the food giants that have started selling their wares directly to online shoppers, during the pandemic. The strategy allows them to cut out the middleman, but the executives behind it say the aim is not to make more money—rather, to learn more about e-commerce and to get data on customers that would normally be harvested by the retailer. Financial Times
Apple accusation
Bluetooth tracker maker Tile has made an allegation to the European Commission that Apple has unfairly disadvantaged its products. The claim alleges that Apple changed its iOS operating system to give Apple an advantage as it prepared to launch a product similar to Tile's. Washington Post
This edition of CEO Daily was edited by David Meyer.