FILE PHOTO: A banh mi sandwich made with a plant-based Impossible Pork patty at the Impossible Foods headquarters in Silicon Valley, in San Francisco, California, U.S., December 19, 2019. REUTERS/Richa Naidu
(Reuters) – Impossible Foods is discussing a new credit line worth several hundred million dollars with its lenders, as the plant-based meat company braces for the economic fallout of the coronavirus outbreak, people familiar with the matter said on Tuesday.
The move comes as many restaurants, bars and food courts, which source plant-based meat from Impossible Foods, shut down or face empty seats as customers stay home to combat the spread of the coronavirus pandemic.
California-based Impossible Foods expects a financial downturn to weigh on its business, the three sources said. Earlier this week it raised roughly $500 million in a series F funding round to bolster its finances and fund expansion.
The fundraising has also increased the amount of money banks are comfortable lending the company, another factor in its decision to explore the credit line, the sources said.
The sources, who requested anonymity as the matter is private, cautioned that the deliberations are still preliminary and that the final decision will be influenced by how the coronavirus outbreak evolves over the coming weeks. Impossible Foods declined to comment.
Companies have rushed to borrow more money and draw down on credit lines to boost their cash coffers in anticipation of a potential global recession as a result of the coronavirus pandemic.
Top Silicon Valley venture capital firm Sequoia recently called the coronavirus healthcare crisis a “black swan” event and urged its start-ups to be careful with cash.
Impossible Foods, whose backers include venture capital investors Khosla Ventures and Horizons Ventures, as well as celebrities like tennis star Serena Williams and singer Katy Perry, has so far raised $1.3 billion in the private market.
Impossible Foods says its burgers are sold at more than 15,000 restaurants around the world. It also recently started selling its products at certain U.S. grocery stores.
Reporting by Anirban Sen in Bengaluru and Joshua Franklin in New York; Editing by Lisa Shumaker