Beyond Meat aims to raise $183.8 million in its initial public offering, according to an amended S-1 filing submitted Monday to the Securities and Exchange Commission. That's a significant increase from the $100 million the company anticipated last fall when first announcing plans for the IPO.
The California-based maker of plant-based meat alternatives told the SEC the initial price for its common stock is expected to be between $19 and $21 per share for a market value of up to $1.21 billion. The company also noted in the filing that it has a history of net losses, stating, "[W]e may be unable to achieve or sustain profitability." In 2018, Beyond Meat posted net revenue of $87.9 million, with a net loss last year of $29.9 million. However, the company anticipates accelerating demand for its products both in the U.S. and internationally.
Beyond Meat said it plans to trade on the Nasdaq Global Market with the ticker symbol BYND. CNN reported the company will start trading in early May. Lead underwriters are Goldman Sachs, JPMorgan and Credit Suisse, and co-managers are BofA Merrill Lynch, Jefferies and William Blair.
The updated $1.21 billion valuation figure for Beyond Meat may not be out of bounds. Although the company has not yet made a profit, it has been busy innovating with popular products — such as Beyond Beef, which is scheduled to be available in stores this fall, as well as pork and poultry alternatives. It has drawn an increasing number of plant-based competitors.
The company's meat-like Beyond Burger has had a strong foothold in the plant-based space for years. In the beginning, its main competitors were legacy frozen veggie burgers such as Kraft Heinz's Boca Burger and Kellogg's Morningstar Farms, which have been in grocery stores for decades.
In recent years, other manufacturers have taken a page from Beyond Meat's book, and there are now several meat-like burgers on grocers' shelves. Lightlife Foods' Lightlife Burger hit retail stores this spring. Nestlé is launching a Garden Gourmet plant-based Incredible Burger. Later this year, Impossible Foods' Impossible Burger will also come to grocery stores.
These plant-based meat alternatives are successfully appealing to carnivores who want to reduce or eliminate the amount of meat in their diets. According to a 2018 study from the Johns Hopkins Bloomberg School of Public Health, 55% of consumers said they were limiting consumption of processed meat, and 41% said they were reducing red meat intake.
Beyond Meat said in the SEC filing that its products are now available in about 30,000 distribution points in the U.S. and other countries, and that it has become a market leader in the plant-based meats segment.
"We enjoy a strong base of well-known retail and foodservice customers that continues to grow," the company said. Given the growing record of success for its products and those of its competitors, Beyond Meat said the U.S. plant-based meat category could eventually be worth up to $35 billion.
However, the company listed in its amended SEC filing a number of risks for potential investors to be aware of prior to the IPO. Besides the history of losses, Beyond Meat said its business, operating results and brand reputation could suffer it the company fails to effectively expand its manufacturing and production capacity, or loses one or more of its limited number of distributors. More specifically, it mentioned relying on raw materials — particularly pea protein — which may or may not be available on a timely basis, at the right price, or in sufficient quantity or quality for its purposes.
A private company since its founding in 2009 by CEO Ethan Brown, Beyond Meat has been able to largely go its own way with $122 million in financial support from backers including Bill Gates, Tyson Ventures, former McDonald’s CEO Don Thompson, the Humane Society of the United States, Obvious Ventures and DNA Capital.
These investors are in line to be rewarded for their confidence in the company if the upcoming IPO is successful — although Brown and his executive team will need to answer to shareholders going forward. And, depending on who buys how many shares, the newly public company may find itself under more pressure to innovate and grow faster than it already has.