Impossible Foods preparing to go public with $10B valuation, Reuters reports


Dive Brief:

  • Impossible Foods is preparing to go public through a listing that could value the plant-based meat company at $10 billion or more, Reuters reported, citing people familiar with the matter. The company would get on the markets in the next year either through a traditional initial public offering or a merger with a special purpose acquisition company (SPAC).
  • Reuters reported the company has worked with a financial adviser to help manage discussions with SPACs after receiving offers at high valuations. Impossible Foods representatives told Food Dive in an email, “As a matter of policy, we decline to comment on all these anonymously sourced, highly speculative articles.”
  • The possibility of an IPO for Impossible Foods has been a hot topic since rival Beyond Meat went public in May 2019. In October 2019, CEO Pat Brown said in an interview that Impossible Foods had no immediate plans to go public, but “there is a pretty high likelihood that at some point in our history, we will decide that that’s worth doing.”

Dive Insight:

While 2020 was a big year for all food companies — especially those in the plant-based sector — Impossible Foods truly stood out.

As the pandemic shuttered restaurant dining rooms, the company that launched its plant-based burgers in restaurants four years earlier accelerated into grocery sales at a breakneck pace. At the beginning of 2020, Impossible Burgers were sold in about 150 grocery stores nationwide. As of this week, they’re at more than 20,000 stores. Impossible Foods shattered fundraising records for the plant-based space last year with a total of $700 million in new investments — a $500 million round that closed in March and a $200 million round that closed in August.

The burgeoning plant-based meat market as a whole saw its sales skyrocket in 2020 as well. Sales last year were worth $1.4 billion, making up 2.7% of all U.S. retail packaged meat sales, according to statistics from SPINS released by the Good Food Institute and Plant Based Foods Association. Sales of refrigerated plant-based meat — the category the Impossible Burger is in — rose 75% from 2019 to 2020. And according to statistics collected by analytics firm Numerator and shared by Impossible Foods, 82 cents of every dollar spent on Impossible Burgers comes directly from money previously spent on animal-based products.

Impossible Foods is also striving to build more sales in 2021. So far this year, the company has cut prices to both foodservice distributors and grocery retailers in an effort to get its products to cost the same as animal-derived meat — which is what Brown has said is his company’s true competition. The CEO, who says Impossible Foods’ goal is to end the need for animal agriculture by 2035, is targeting the traditional meat industry both through Impossible Foods’ products and a new marketing campaign that appeals to meat eaters.

With all of that action, there are investors clamoring to own a piece of Impossible Foods. According to InvestorPlace, online IPO fundraising platform Manhattan Street Capital offered shares in Impossible Foods last summer through a special investment vehicle. This offering, only sent to accredited investors and with minimum investments of $100,000, raised $27 million, the financial website reported. At the time, Manhattan speculated that Impossible would be filing an S-1 with the U.S. Securities and Exchange Commission and starting the process to go public in weeks or months.

While that process hasn’t yet played out, a quick IPO through a SPAC could quickly bring the company to the market. Several food companies have recently gone public through SPACs, ranging from snacking company Utz to high-tech greenhouse operator AppHarvest, whose president is former Impossible Foods CFO David Lee. SPACs work well for companies that want to get on the market fast and capitalize on hype, which may be what Impossible Foods is looking for.

No matter which method Impossible Foods might choose to go public, investors will be anxious for it. Since Beyond Meat’s IPO, its share value has more than doubled. For the ordinary investor who wants to put money toward alternative proteins, there aren’t many other options. The Eat Beyond Global Investment Fund, a platform that supports several companies in the sector, was established for this reason and is traded on markets in the U.S., Canada and Germany. But with the exception of plant-based egg and cell-based meat maker Eat Just — which may be going public itself this year — Eat Beyond’s portfolio companies are smaller players and don’t have the buzz of Impossible Foods.

If Impossible Foods does decide to go public, the publicly traded plant-based sector will quickly get more exciting. Also planning a U.S. IPO this year is Swedish oat milk leader Oatly, another fast-growing company that is sure to be met by legions of excited investors.