Rumours have been surfacing on Wall Street for years now that Sweetgreen is planning to go public. Now, those whispers are proving true as the restaurant chain has confidently filed for an IPO.
Thanks to a surge in digital sales during the pandemic, Sweetgreen is finally making its market debut. The company’s latest funding round gave it a $1.8 billion valuation after it raised $156 million from Durable Capital Partners.
The salad maker follows a long line of recent companies with impressive valuations making their market debut, each of which seeks to capitalize on growing interest in emerging industries like the healthy food sector.
What is Sweetgreen?
Sweetgreen is a fast casual restaurant chain that specializes in serving healthy salads. Based in the U.S., the firm was founded in 2007 to offer consumers a healthier alternative to fried fast food.
When is Sweetgreen going public?
Sweetgreen has not given an exact date for its IPO but it is expected to go public by the end of 2021, when the SEC completes its review of the company.
What price is Sweetgreen going public at?
Sweetgreen has not disclosed how many shares it will offer or the price range of shares yet.
Since it has not produced an S1 yet, a prospectus that companies report before going public, potential investors do not have that many numbers to analyze.
Sweetgreen told The New York Times that it recorded revenue of $300 million in 2019. However, the company was hit hard when COVID-19 struck. During the health emergency, Sweetgreen received $10 million from the Paycheck Protection Program to help its “dramatically affected” revenues and allow it to rehire its furloughed workers.
On a positive note, the company was in a good position to return the money once it realized “so many small businesses and friends in the industry who needed it most did not receive any funds.” This was a great PR move for the firm.
Sweetgreeen’s growth potential
At the end of 2020, things started to improve for Sweetgreen. At this time, the Washington-based company announced its plans to open a new drive-thru prototype in Colorado by winter to capitalize on the stay-at-home workforce who couldn’t dine indoors. The drive-thru will offer a digital-order pickup, while the drive-in will entail a concierge service for in-car dining. Sweetgreen is also moving into suburban areas after mainly focusing on urban zones.
These innovative ideas prove just how strong the company is able to bounce back in struggling times.
Just like its competitor Chipotle Mexican Grill, Sweetgreen benefited from using technology to boost sales even prior to the pandemic. Sweetgreen built a mobile app and has ensured that its restaurants make picking up orders as easy as possible. Before the pandemic, around 50% of sales were digital but that increased by nearly 100% by last September, whilst delivery sales grew by 75%.
Sweetgreen looks like it might have a bright future after the company has made moves to bolster its brand recognition by partnering with tennis grand slam champion Naomi Osaka. A few weeks later, it introduced a new brand image to “reimagine fast food and speak to future generations about the importance of what they eat.”
Some experts believe that Sweetgreen has the potential to do well with the millennial and Gen-Z generations who are becoming more health conscious. As the company aims to be a “positive force on the food system” by focusing on healthy food and sustainability, this might just be the health food stock for investors to watch as Wall Street gets ready to gobble up another IPO.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
Content Writer at MyWallSt
Nicole's favorite stock is Etsy because she loves its original and handmade items. She believes people are going to stop buying mass-produced items and start purchasing ‘one of a kind’ fashions and furnishings. In a world of sameness, Etsy has the advantage.