Beyond Meat to List on NASDAQ with $1.2 Billion Valuation

Beyond Meat

One of the top makers of vegan chicken and beef substitutes is making major waves in the food and tech scenes. While likely to be overshadowed by other major tech IPO’s coming in the following months, Beyond Meat Inc announced Monday that it was planning to raise $184 million in its own initial public offering for a total valuation up to $1.2 billion.

According to its latest regulatory filing, the California-based start-up plans to sell 8.75 million shares priced between $19 to $21 per share on the NASDAQ. Currently, the company has disclosed financing of up to $143 million from various venture investors like Obvious Ventures, Tyson Ventures, and Kleiner Perkins, with the later own 15.9 percent of the company.

Beyond Meat also has a number of higher-profile backers. Microsoft’s co-founder Bill Gates and actor Leonardo DiCaprio are among the most famous backers of the company, while well known corporate executives such as McDonalds CEO Don Thompson also had a stake in the company’s success.

Beyond Meat first filed its prospectus back in November 2018. Since then, the company has made a number of amendments to include new suppliers for pea protein, which is the core ingredient behind its signature vegan burger, poultry, and sausage alternatives.

While the plant-based meat substitute sector has been growing rapidly, Beyond Meat does have a number of competitors in the space. It’s main rival, Impossible Foods Inc, announced two weeks ago it had a partnership with Burger King and would begin selling a meatless Whopper in many restaurants. After that, Beyond Meat secured a deal with fast-food chain Del Taco to provide a meatless version of their tacos.

The company went on to say in it’s filing that it’s been struggling to meet the quantity of consumer demand for alternative meatless products. Beyond Meat has been operating at a loss since it was founded in 2009, choosing like many start-ups to focus on aggressive expansion at the expense of profitability. The company also said that its future financial performance was closely dependent on its ability to secure ingredient supplies such as pea protein from third-party providers, of which there is a limited number.

At the moment, Beyond Meat products are available at 30,000 retail locations and restaurants in the U.S. Their net revenue increased massively to $87.9 million in 2018, up from $32.6 million the previous year.

In terms of profitability, the company still reported a significant $29.9 million in losses in 2018, a slight decrease from 2017’s $30.4 million. While significant, the fact that losses stayed the same despite revenue almost tripling during the same period is a good sign going forward, although investors undoubtedly have a soft spot for start-ups that are able to operate profitably.

Beyond Meat will trade on the NASDAQ under the ticker symbol BYND. The major underwriters in the deal are Goldman Sachs, J.P. Morgan, Credit Suisse, Bank of America Merrill Lynch, William Blair and Jeffries.

While undoubtedly overshadowed by recent IPO’s that dwarf the smaller start-up in comparison, Beyond Meat’s eventual entrance onto the public market sometime soon marks an interesting investment opportunity.