Sweetgreen Files for an IPO
Sweetgreen Seen as a Growth Play
Sweetgreen, a popular salad chain, has filed for an initial public offering. The company had a valuation of $1.8 billion earlier this year when it raised a round of venture funding. In 2019, before the pandemic, Sweetgreen had revenue of more than $300 million.
The restaurant has a loyal following among busy office workers and those seeking a healthier alternative to fast food. Launching an IPO now as pandemic restrictions ease is seen as a growth play. Long before the pandemic, Sweetgreen invested in its mobile app to reduce long lines at its stores. That investment paid off when the pandemic set in. As demand for online ordering is expected to stay strong even as restrictions ease, Sweetgreen’s strong mobile ordering system gives it an advantage.
Sweetgreen’s Plans for Expansion
Sweetgreen has been seen as an IPO candidate for years and was even named as a potential SPAC target. It finally tapped Goldman Sachs (GS) to help with its IPO. Other investors in the company include D1 Capital, Lone Pine, Fidelity Investments, and T. Rowe Price (TROW)
The chain is likely to tout its growth potential when publicizing the IPO to investors. It only has 121 locations currently but sees an opportunity for major expansion. Sweetgreen is piloting a restaurant in Highlands Ranch, Colorado this winter, which will include its first drive-thru lanes. It is also expanding into the suburbs after spending its first 10 years focused on urban locations.
Years in the Making
Sweetgreen’s IPO, which it filed with the Securities and Exchange Commission, is expected to commence once the regulator finishes its review. Sweetgreen is among many startups seeking to enter the public markets either via an IPO, direct listing, or SPAC transaction.
Sweetgreen is also a favorite of venture capitalists looking for the next growth play. It has raised a total of $670 million in venture funding. As pandemic restrictions ease, many are betting that companies like Sweetgreen are well positioned to benefit. It will be interesting to see if investors agree when the salad chain operator makes its public debut.
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