According to sources familiar with the matter at hand, Impossible Foods Inc is preparing for an IPO which could see its valuation touch around $10 billion or more; this is significantly more than the $4 billion it was worth during a private funding round in 2020.
The development highlights growing demand for plant-based meat products, driven by environmental and ethical concerns among consumers.
Sources say, the company is exploring going public either through an initial public offering (IPO) in the next 12 months or through a merger with a special purpose acquisition company (SPAC).
Redwood City, California-based Impossible Foods Inc has worked with a financial adviser to help manage discussions with SPACs after it received offers at a lucrative valuation, said sources while adding, opting for the SPAC option could dilute stakes of existing Impossible Foods shareholders by a bigger extent compared to an IPO.
A merger with a SPAC has emerged as a popular IPO alternative for companies seeking to go public with less regulatory scrutiny and more certainty over the valuation that will be attained and funds that will be raised.
Sources preferred the cover of anonymity given that the talks are private; they also cautioned that the deliberations are subject to market conditions and the company may opt to pursue another private fundraising round.
Impossible Foods’ spokeswoman declined comment.
According to PitchBook data, Impossible Foods, whose backers include venture capital investors Khosla Ventures and Horizons Ventures, along with celebrities such as rapper Jay-Z, and tennis star Serena Williams has so far raised $1.5 billion in the private market.
Last year the company’s retail sales hit $7 billion, up 27% year on year, according to a report by the Good Food Institute and the Plant-Based Foods Association (PBFA).
The number of locations where Impossible Foods’ sells its burgers has also increased in the past year to more than 20,000, up from 150 stores, said the company.