(Reuters) – Impossible Foods Inc is preparing for a public listing that could value the American plant-based hamburger maker at about $ 10 billion or more, according to people familiar with the matter.
This will be significantly more than the $ 4 billion the company received in a private funding round in 2020. This will highlight the growing demand for plant-based meat products driven by environmental and ethical consumer concerns.
Sources said Impossible Foods is exploring the possibility of going public through an initial public offering (IPO) in the next 12 months or a merger with a so-called Special Purpose Acquisition Company (SPAC).
The Redwood City, California-based company was working with a financial advisor to help negotiate with SPAC after receiving lucrative valuation proposals, sources said. The SPAC publication could weaken Impossible Foods’ existing shareholders, however, more than an IPO, the sources added.
SPAC is a shell company that raises funds in an IPO to acquire a private company. For the acquired company, the merger is an alternative way to go public through an IPO.
The SPAC merger has become a popular IPO alternative for companies looking to go public, with less regulatory oversight and more confidence in the valuation to be achieved and the funds to be raised.
Sources, who requested because the discussions are private, warned that the discussions are subject to market conditions and the company may prefer to have another private round of fundraising.
An Impossible Foods spokeswoman declined to comment.
According to PitchBook, Impossible Foods, sponsored by venture capitalists Khosla Ventures and Horizons Ventures, and celebrities such as tennis star Serena Williams and rapper Jay-Z, raised $ 1.5 billion in the private market.
In 2020, plant-based retail sales in the United States reached $ 7 billion, an increase of 27% year over year, according to a report by the Institute of Good Nutrition and Plant Food Association (PBFA).
Founded in 2011, Impossible Foods sells its meatless burgers and sausages in grocery stores and has partnerships with companies such as Burger King and Disney.
The number of places selling Impossible Foods hamburgers has increased over the past year to more than 20,000 out of 150 stores, according to the company.
Rival competitor Beyond Meat Inc is trading more than 400% above its IPO price since 2019.
Impossible Foods CFO David Lee stepped down earlier this year to join closed-farm builder AppHarvest, and David Boretski is currently the company’s interim CFO.
Reporting by Anirban Sen in Bangalore and by Joshua Franklin in Boston; Edited by Nick Zieminski