Sweetgreen revealed Monday that it will go public, becoming the third restaurant company in the past seven weeks to do so.
The company said it confidentially submitted a draft registration statement to the SEC relating to the proposed IPO of its Class A common stock. The number of shares to be offered and the price range for the proposed offering haven’t been determined yet. The IPO is expected to start after the SEC completes its review process.
Bloomberg reported in mid-May that Sweetgreen was interested in going public. The media outlet said the salad chain is working with Goldman Sachs. 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.
Sweetgreen’s COVID journey began with a rough start. The brand applied for and received $10 million from the Paycheck Protection Program to resolve “dramatically affected” revenues and rehire furloughed employees. However, the chain returned the money once it realized “so many small businesses and friends in the industry who needed it most did not receive any funds." Six months later, CEO Jonathan Neman said Sweetgreen had to cut 20 percent of its corporate workforce in an effort to reduce investment in areas that don’t support its two-year objectives.
The trajectory turned positive before 2020 ended as Sweetgreen announced plans to open a new drive-thru prototype in Highlands, Colorado. 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.
More recently, the chain bolstered its brand recognition by partnering with three-time tennis grand slam champion Naomi Osaka. A few weeks afterward, Sweetgreen introduced a new brand identity to “reimagine fast food and speak to future generations about the importance of what they eat.” With the rebrand, Sweetgreen aims to be a “positive force on the food system” by focusing on food, sustainability, people, and culture.
In addition to Sweetgreen, Dutch Bros Coffee and Krispy Kreme are moving forward with IPO plans. Sweetgreen and Dutch Bros will be newcomers to the stock market, while Krispy Kreme was previously public for 16 years before JAB Holding took it private for $1.35 billion in 2016.
Two other brands reportedly interested in an IPO are Panera and Torchy’s Tacos. The New York Times said in late April 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 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.