Sweetgreen Inc., after a round of funding less than a year ago, made a spectacular debut on the bourses as its price zoomed 77% on debut. The company had raised 364 million in an upsized IPO.
According to Bloomberg News, the salad chain based out of Los Angeles, shares opened trading on Thursday at $52 after selling it for $28 in the IPO. The stock closed at $49.50 after doubling its price intraday trade in New York, giving Sweetgreen a market valuation of $5.3 billion. After accounting for employee stock options and other holdings, the company’s fully diluted valuation stands around $6 billion.
In January, funding by investors led by Durable Capital Partners, the company was valued at $1.78 billion. The other investors are T. Rowe Price, Anchorage Capital Group, D1 Capital Partners, Lone Pine Capital, and Fidelity Investments.
According to Bloomberg data, 14 companies belonging to the food and beverage sector came out with IPO in the U.S. this year. Nine of these companies are trading below their offering prices after the listing valuations for the industry were optimistic despite inflation, labor crunch, and rocky earnings.
Chobani Inc., makers of Yoghurt, filed for listing on Wednesday. The company has not set a price range for the shares sale and disclosed increasing sales, lower losses, and new products like oat milk.
Sweetgreen had offered 13 million shares to the public for $28 after marketing 12.5 million shares in the price range of $2 To $25.
Georgetown University graduates Nathaniel Ru, Nicolas Jammet, and Jonathan Neman founded the company in 2007. It posted an $ 87 million net loss on $243 million revenue for 39 weeks, ending on September 26. As per filing details, this loss was less than a $100 million loss on revenue of $ 161 million in the year earlier.
Real Food
In an interview with Bloomberg TV, Neman said that Sweetgreen, now present in 140 locations across 13 states, plans to double its footprint in three to five years. “Our mission is to provide real food to people and build healthy communities and transform fast food and make it healthier. The company is at an exciting point of inflection’, he said.
Sweet green plans to use the IPO funds towards working capital and general corporate expenses and develop the technology it acquired after it purchased Spyce Food Co. The Boston-based Spyce is known for its robotic cooking and serving techniques.
The lead managers to the IPO are Goldman Sachs, JPMorgan Chase. The shares of Sweetgreen are traded on New York Stock Exchange under the SG symbol.
