Sweetgreen is reportedly planning to go public, joining a growing list of brands that are exploring a journey to the stock market.
Bloomberg said the salad chain is working with Goldman Sachs and that an initial public offering could happen this year. Sweetgreen, which has more than 120 locations, was valued at $1.78 billion in January after raising $156 million from Durable Capital Partners. In September 2019, the chain disclosed that it picked up $150 million from Lone Pine Capital and D1 Capital Partners with participation from True Ventures and other existing investors. Prior to that, the brand raised $200 million in November 2018 in a funding round led by asset management company Fidelity Investments.
The COVID road has been up and down for Sweetgreen. In April 2020, the chain decided to return $10 million it received from the Paycheck Protection Program. The brand applied for the loan in response to “dramatically affected” revenues and to hire back furloughed employees, but it returned the money once it realized "so many small businesses and friends in the industry who needed it most did not receive any funds." In October 2020, CEO Jonathan Neman announced the brand was cutting 20 percent of its corporate workforce. The move was an effort to reduce investment in areas that don’t support the chain’s two-year objectives, such as accelerating growth in new markets, reducing menu and operational complexity, investing in store leadership, and enhancing the digital business.
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A couple of months later, the Los Angeles-based fast casual announced that a new restaurant prototype in Highlands, Colorado, will have drive-thru and drive-in elements. The drive-thru will be for digital-order pickup, while the drive-in will offer guests a dedicated concierge and in-car dining. There will also be an outdoor patio for guests who wish to leave their car and dine on-site. Other innovative features include rooftop solar panels, large windows that allow guests to see the kitchen and prep areas, and tactical wayfinding that helps create a seamless experience.
In May, Sweetgreen placed itself in the national spotlight by signing a partnership agreement with young tennis star Naomi Osaka, who will be the chain’s first national athlete ambassador. The three-time Grand Slam singles champion worked with the brand to design a custom bowl that will debut on May 20.
The company was founded by in 2007 by Neman, Nathaniel Ru, and Nicolas Jammet with a mission to “inspire healthier communities by connecting people to real food.” To that end, the brand said in February that it expects to be carbon neutral by 2027.
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Sweetgreen is at least the fifth company to be linked to an IPO in the past three months. Earlier in May, Krispy Kreme said it wants to return to the stock market. The doughnut chain was public for 16 years before being acquired by JAB Holding for $1.35 billion in 2016. Around the same time, Bloomberg reported that the 450-unit Dutch Bros Coffee is considering an IPO and seeking to be valued at roughly $3 billion.
Prior to that, the New York Times reported that JAB completed an $800 million refinancing for Panera that could "pave the way" for the company to return to the stock market. The publication said Panera may not require a traditional IPO, opening the door for a special acquisition company. JAB bought Panera for $7.5 billion in 2017. Additionally, in March news broke that Torchy's Tacos is headed toward an IPO, although nothing is final. The taco chain is reportedly working with Morgan Stanley, Bank of America Corp, and JPMorgan Chase & Co.
The most recent restaurant to reach the stock market is BurgerFi, which did so through a special acquisition company. BurgerFi and OPES Acquisition Corp. agreed to merge in June 2020, with an anticipated initial enterprise value of approximately $143 million. The 119-unit chain rung the Nasdaq bell in December 2020. Then In February, Fertitta Entertainment, which includes Golden Nugget Casinos and Landry’s, agreed to join Fast Acquisition Corp. in a deal that will value the company at $6.6 billion.
Kura Sushi USA, a revolving sushi-style restaurant, went the traditional IPO route in 2019. The concept raised $41 million in its initial public offering. Prior to Kura Sushi, Wingstop and Fogo de Chao went public in 2015. However, Fogo de Chao went private in 2018.