Health-conscious quick-service restaurant (QSR) chain Sweetgreen Inc., has filed confidentially for an initial public offering of stock (IPO), the firm said in a Monday (June 21) press release. The Los Angeles startup said the number of shares of Class A common stock to be sold and the price range for them has yet to be determined.
The proposed IPO now faces a review by the federal Securities and Exchange Commission. Market conditions and other factors could still change Sweetgreen’s plans.
Sweetgreen had been a rumored IPO candidate for years, Axios reported, saying the restaurant chain had not pursued the special purpose acquisition company (SPAC) route to going public. A SPAC first goes public to raise cash, and then goes shopping for a takeover target.
The news outlet said that Sweetgreen, started in 2007, would pitch its health-conscious offerings as on the cusp of a consumer trend. With over 100 stores, Sweetgreen sees lots of room for growth — think a Chipotle-sized opportunity. Investors include: Revolution, T. Rowe Price, Red Sea Ventures, Collaborative Fund and, Signatures Capital.
As the restaurant industry recovers from the pandemic’s economic crisis, many questions are still on the table. At the top: Will delivery services have staying power over on-premises dining as the pandemic dies down? Another: Will quick-service restaurants have an advantage over fast-casual?
David Bloom, chief development and operations officer for quickly growing fast-casual chains Capriotti’s Sandwich Shop and Wing Zone, said his restaurants will be in the “sweet spot” for appealing to consumers. In a recent interview with PYMNTS, he said fast-food QSRs will be at a relative disadvantage.
In fact, many restaurant chains have noticed elevated drive-thru sales during the pandemic, which they expect to continue. PYMNTS’ October Order to Eat Tracker®, created in collaboration with Paytronix, showed that drive-thru visits accounted for 42 percent of all restaurant trips during 2020’s second quarter.
With that in mind, many leading QSRs have actually been designing new stores centered on drive-thru windows. Even Starbucks, which has historically positioned itself as a place for people to come together, is creating drive-thru-only stores that have no seating and are very small units, commented Rosalind Brewer, chief operating officer.