Impossible Foods Considers Going Public via SPAC or IPO — Valuation Estimated at $10 Billion

By Mariliana Fotopoulou Friday, April 9, 2021

Impossible Foods, a California-based company that develops plant-based meat products, is considering going public in a deal that could potentially value the business at more than $10 billion.

Impossible Foods headquarters in Silicon Valley.

Capitalizing on High Demand for Plant-Based Products

The expected business valuation would be significantly higher compared to the company’s valuation of $4 billion after a private funding round in 2020. It would also underscore the surging demand for plant-based meat substitutes as a result of ethical and environmental concerns among customers.

The California-based business is considering going public within the next 12 months either through an initial public offering (IPO) or a merger with a blank-check company, the so-called SPAC, according to Reuters.

Impossible Foods and its financial advisers are in talks with a SPAC after receiving offers at a substantial valuation. But the SPAC option could dilute the company’s existing shareholders significantly more than an IPO.

A SPAC is a shell company that raises capital in an IPO in a bid to buy a private business. Apart from an IPO, a reverse merger represents an alternative way to acquire the company. SPAC deals have been increasingly popular recently as companies were looking to avoid regulatory inspections and due to greater assurance of the valuation that will be gained and funds that will be secured.

Reuters’s story adds that Impossible Foods will make the decision based on market conditions and may even go for an additional private funding round.

The company has secured a total of $1.5 billion in private funding, backed by venture capital (VC) investors, including Khosla Ventures and Horizons Ventures, and even celebrities such as Serena Williams and Jay-Z.

Impossible Foods garnered $7 billion in retail business sales last year, marking a 27% year-over-year (YOY) surge. The company sells its plant-based products in grocery stores but is also collaborating with companies like Burger King and Disney. The number of locations where consumers can buy Impossible Foods products increased in 2020 from 150 stores to over 20,000, the company said.

A few months ago, Impossible Foods’s CFO David Lee left the business to join indoor farm builder AppHarvest, with David Borecky replacing him as the company’s interim CFO.

Last August, Impossible Foods raised $200 million in a private funding round and said it would use the proceeds to invest in research, product development, and internal operations. Impossible Foods is one of the first companies to launch plant-based products that cook and taste like meat.

The business began selling its burgers online in June in the US after a surge in beef prices as the coronavirus pandemic forced several meat plants to shut down. A key player in the plant-based meat industry, Beyond Meat, saw its shares soar by 400% compared to its IPO price from two years ago.

Market Research Future estimates that the global plant-based food market is expected to reach a market valuation of nearly $38 billion by 2027.

Summary

Plant-based meat maker Impossible Foods is exploring going public through an IPO or a merger with a SPAC in a deal that could value the business at more than $10 billion.

About the Author


Headshot of Mariliana Fotopoulou

Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.

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