UPDATE: June 21, 2020: Sweetgreen has confidentially filed for a proposed initial public offering of Class A common stock, according to a press release. The amount of shares and price have yet to be determined. The IPO is expected to commence following the U.S. Securities and Exchange Commission's review process and is subject to market and other conditions.
- Fast casual salad chain Sweetgreen is planning a U.S. IPO that could take place in 2021, Bloomberg reports, citing people with knowledge of the matter. Sweetgreen did not respond to Restaurant Dive's request for comment before press time.
- The chain is reportedly working with Goldman Sachs Group on a listing.
- This news comes on the heels of a $156 million cash infusion led by Lone Pine Capital in January, which brought Sweetgreen's valuation to $1.78 billion. The chain also plans to pilot a drive-thru this year in Highlands Ranch, Colorado, and invest in suburban expansion, deviating from its pre-pandemic focus on urban markets.
As a public company, Sweetgreen could potentially deepen its off-premise channel. The fast casual chain's current development plans were sparked by the pandemic, but Chief Concept Officer Nic Jammet told CNBC in December that Sweetgreen had been mulling drive-thru lanes for years prior.
Over half of Sweetgreen's transactions were digital orders pre-pandemic, and its digital business has increased more than 70% during the pandemic, so it makes sense for the company — which in the past has been synonymous with work lunches in downtown centers — to focus on off-premise touchpoints that could expand its reach into new markets. Those new markets could be critical to its future success, as once bustling business districts may never return to their heyday thanks to remote work and workers who have moved to less expensive areas.
"The reality is many of our restaurants in dense urban areas, particularly in NYC, have yet to recover," Sweetgreen CEO Jonathan Neman wrote in a letter to employees in December. "We expect that this will be the case for the foreseeable future."
That same month, Sweetgreen announced it was cutting its corporate workforce by 20% as part of a two-year restructuring and reorganization plan that would help bolster digital ordering and support growth in new areas.
Going public could also open up more capital to acquire companies and expand capabilities. In 2019, for example, Sweetgreen made its first acquisition by buying meal delivery service Galley Foods in an undisclosed cash and stock deal. At the time, Neman said in a company release that the deal would allow Sweetgreen to tap into "Galley Foods' unparalleled insight into delivery." The restaurant has access to Galley's logistics technology and courier operations, and Galley Foods CEO Alan Clifford became Sweetgreen's VP of logistics before shifting to VP of digital channels in December of 2020. He now leads Sweetgreen's Outpost program, which was suspended during the pandemic, and oversees in-store pickup and digital ordering as well as delivery.
Sweetgreen isn't the only restaurant chain mulling going public, either. Torchy's Tacos and Dutch Bros Coffee are reportedly considering IPOs, and Krispy Kreme announced last week that it confidentially filed paperwork with the U.S. Securities and Exchange Commission to go public.