(Reuters) – Impossible Foods Inc. is preparing for a public quote that could value the U.S. plant-based burger maker at about $ 10 billion or more, according to people familiar with the matter.
This would be substantially higher than the $ 4 billion the company was worth in a round of private financing in 2020. It would highlight the growing demand for plant-based meat products, driven by ethical and environmental concerns of consumers.
Impossible Foods is exploring making it public through an initial public offering (IPO) in the next twelve months or a merger with the so-called special purpose acquisition company (SPAC), sources said.
The Redwood City, California-based company has worked with a financial advisor to help manage talks with SPAC after receiving offers with a lucrative valuation, sources said. Making it public through an SPAC could dilute Impossible Foods ’existing shareholders, but, to a greater extent than a IPO, the sources added.
An SPAC is a shell company that raises funds on an IPO with the goal of acquiring a private company. For the company being acquired, the merger is an alternative way to make itself public through a IPO.
The merger with an SPAC has emerged as a popular IPO alternative for companies that want to go public with less regulatory control and more security over the valuation that will be achieved and the funds that will be raised.
Sources, who requested because the discussions are private, warned that the deliberations were subject to market conditions and that the company may choose to continue another private round of fundraising.
An Impossible Foods spokeswoman declined to comment.
Impossible Foods, among its sponsors, are venture capital investors Khosla Ventures and Horizons Ventures, as well as celebrities such as tennis star Serena Williams and rapper Jay-Z, have so far raised $ 1.5 billion in the private market. according to PitchBook data.
In 2020, U.S. plant-based retail sales reached $ 7 billion, up 27% year-on-year, according to a report by the Good Food Institute and the Plant-Based Foods Association (PBFA).
Founded in 2011, Impossible Foods sells its meatless burgers and sausages to grocery stores and also has partnerships with people the size of Burger King and Disney.
The number of places where Impossible Foods burgers are sold has increased in the last year to more than 20,000 from 150 stores, the company said.
The shares of rival Beyond Meat Inc are trading more than 400% above their IPO since 2019.
David Lee, chief financial officer of Impossible Foods, resigned earlier this year to join domestic farm builder AppHarvest, with David Borecky currently as the company’s interim chief financial officer.
Reports of Anirban Sen in Bangalore and Joshua Franklin in Boston; Edited by Nick Zieminski