Oatly planning $1bn IPO for this year: report

Plant-based milk maker Oatly is planning to go public later this year in an IPO that could raise as much as $1 billion, according to CNBC. However, any eventual IPO valuation would “depend on the status of the economy in the face of the [Covid-19] pandemic,” the network said, citing sources familiar with the matter.

The Swedish company has retained investment banks Morgan Stanley, JPMorgan Chase, and Credit Suisse to manage the share offering, according to reports.

If it happens, it would be the latest in a string of alt-protein IPOs, starting with Beyond Meat‘s $3.8 billion NASDAQ float in May 2019. Others to have gone public in the category include plant-based snack maker Laird Superfood, which raised $184 million from its NYSE American debut last September, and Canadian alt-protein investment fund Eat Beyond‘s Toronto debut last November.

Alt-protein has also gotten in on the SPAC craze; in the same month that Eat Beyond went public, Natural Order Acquisition Corp raised $230 million via its NASDAQ listing with the objective of buying businesses “focused on technologies and products related to plant-based food and beverages, alternative protein, and other alternatives to animal products.” It’s yet to announce any acquisitions.

Last July, Oatly raised $200 million in a funding round led by Blackstone Growth, the growth equity vehicle of US private equity giant Blackstone Group.

Dutch bank Rabobank‘s Rabo Corporate Investments and New York-based Orkila Capital also participated alongside Oatly’s co-founders and celebrity investors including TV personality Oprah Winfrey, Hollywood star Natalie Portman, former Starbucks chairman and CEO Howard Schultz, and rapper Jay-Z through his Roc Nation company.

That round was reported to value the alt-milk maker at around $2 billion.

At the time, Oatly employed around 550 staff across Europe, Asia Pacific, and North America, with its products available in over 50,000 locations across 20 countries. It said the funding would be used to expand its presence and open new production facilities in all three regions, in addition to hiring talent to drive this growth plan.

Malmö-based Oatly was founded in the 1990s around scientific research into plant-based proteins carried out at nearby Lund University. In 2013 it relaunched as a sustainability-focused, consumer packaged goods (CPG) brand. Today it produces and markets a range of plant-based dairy alternatives made from oats using enzymatic action.

The company recorded sales of $200 million in 2019. It’s expected to double that figure for 2020 and hit profitability this year, according to Mergermarket.

Oatly co-founder speaks to AFN on scaling alt-milk and the need for local food production – read more here

While Oatly has been keen to promote its sustainability credentials, it has received criticism from some quarters for accepting investment from Blackstone.

The private equity firm holds stakes in infrastructure companies which have been accused of contributing to deforestation of the Amazon basin – something that Blackstone had earlier denied.

The fact that Blackstone has extensive interests in fossil fuel extraction — while its CEO Steve Schwarzman donated to political campaigns in support of outgoing US president and apparent climate change denialist Donald Trump — suggested to many that the firm’s values didn’t fully align with those of Oatly’s typically eco-conscious customer base.

The alt-dairy company responded to the backlash with an open letter, saying it “thought that if we could convince [Blackstone] that it’s as profitable (and in the long-term even more profitable) to invest in a sustainability company like Oatly, then all the other private equity firms of the world would look, listen, and start to steer their collective worth of $4 trillion into green investments.”

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