Impossible Foods mulling IPO at $10 billion valuation

Impossible Foods, the makers of the widely popular plant-based burgers, plans to go public with a likely valuation of $10 billion.

The vegan burger company was valued at $4 billion at its last funding round in March 2020.

Impossible is still undecided over whether to take the special purpose acquisition route (SPAC) or go independently for its IPO. This could happen within a span of the next 12 months.

It is still exploring the options with a financial advisor group. 

Impossible is headquartered in Redwood City, California. If it takes the SPAC route then the existing shareholders would lose a substantial part of their holdings in the company. 

Impossible Foods was started in 2011 by a biochemistry professor from Stanford Medical School, named Pat Brown. He now heads the company.

The company is backed by venture capitalists Khosla Ventures and Horizons Ventures, and cities such as pop icon Katy Perry to tennis champion Serena Williams and rapper Jay-Z. Impossible Foods has so far raised $1.5 billion in the private market, according to Reuters.

The SPAC route has become the preferred way of reaching the market, without having to go through the time-consuming regulations of the governing bodies. More than $98 billion has been raised across 306 SPAC IPOs so far in 2021, surpassing last year’s record of $83 billion, according to data from SPACInsider.

These companies are called the blank check firms and the Securities and Exchange Commission has stepped in to warn all companies that there are certain legal obligations and risks involved in raising capital through such firms. Otherwise, the companies can attract fines.

Impossible Foods sells its meat-free burgers and sausages in grocery stores and also has partnerships with Burger King and Disney.

It is now available in more than 20,000 locations, up from 150 stores in 2019, the company has said.

In 2020, U.S. plant-based retail sales hit $7 billion, up 27% year on year, according to a report by the Good Food Institute and the Plant-Based Foods Association (PBFA).

Sales of refrigerated plant-based meat rose 75% from 2019 to 2020. And according to 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 has cut prices of its products in a bid to compete with the animal-derived meat burgers and to increase sales. Brown, the CEO, says Impossible Foods’ goal is to end the need for animal agriculture by 2035. In its efforts to reach this goal, it is targeting the traditional meat industry both through Impossible Foods’ products and a just-launched new marketing campaign that will appeal to meat-eaters.

There have been reports of Impossible Foods taking the IPO route ever since rival Beyond Foods went public in May 2019. In an interview then, CEO Pat Brown had stated 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.”

A spokeswoman for Impossible Foods declined to comment.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

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