Salad Chain Sweetgreen Attains $6 Billion Value in Debut
(Bloomberg) -- Sweetgreen Inc. soared 77% in its trading debut after raising $364 million in an upsized initial public offering, more than tripling its valuation from a funding round less than a year ago.
Shares of the Los Angeles-based salad chain opened trading Thursday at $52 after selling for $28 each in the IPO. After briefly doubling, they closed at $49.50 in New York trading, giving the company a market value of $5.3 billion. Accounting for employee stock options and similar holdings, the company has a fully diluted value closer to $6 billion.
Sweetgreen was valued at $1.78 billion in a January funding round led by Durable Capital Partners. Its biggest investors include affiliates of Fidelity Investments, T. Rowe Price, Revolution Growth, D1 Capital Partners, Anchorage Capital Group and Lone Pine Capital, according to its filing.
The IPO is the the 14th this year in the U.S. by food and beverage companies, according to data compiled by Bloomberg. Nine of those are trading below their offering price after listing at valuations that proved optimistic amid labor shortages, rising prices and a rocky earnings season for the sector.
Yogurt maker Chobani Inc. filed on Wednesday to go public, disclosing shrinking losses and increased sales with the addition of products such as oat milk. Chobani will set terms for the share sale later.
Sweetgreen sold 13 million shares in its IPO Wednesday for $28 each after marketing 12.5 million of them for $23 to $25.
The company was started in 2007 by Georgetown University graduates Jonathan Neman, Nathaniel Ru and Nicolas Jammet. It had a net loss of $87 million on revenue of $243 million for the 39-week period ended Sept. 26, compared with a loss of more than $100 million on revenue of $161 million a year earlier, the filing shows.
Sweetgreen, which now has 140 locations in 13 states, plans to double its footprint in three to five years, Neman said in a Bloomberg TV interview
“We believe we’re at a very exciting inflection point,” Neman said. “Our mission is building healthy communities by connecting people to real food and we’d like to transform fast food and make it healthier.”
Sweetgreen plans to use proceeds from the offering for general corporate purposes and working capital, as well as to develop the technology it acquired through the purchase of Spyce Food Co. Boston-based Spyce uses robotic cooking and serving techniques to automate much of its production line.
The offering was led by Goldman Sachs Group Inc. and JPMorgan Chase & Co. Sweetgreen’s shares are trading on the New York Stock Exchange under the symbol SG.
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