If you grew up during the days when fast-food chains like McDonald's and Burger King ruled the day, you might be surprised to learn that a fast-food, or rather fast-casual, salad chain would be all the rage. Well, it's true.
Meet Sweetgreen (if you haven't already), the new darling of the burgeoning fast-casual restaurant scene. Sweetgreen serves up healthy food, and with 2019 revenue topping $300 million and a unicorn valuation of over $1billion, it's apparent people love Sweetgreen.
A confidential IPO
Sweetgreen is doing so well it has confidentially filed for an initial public offering (IPO). Founded in 2007 by three Georgetown seniors who just wanted some healthy yet delicious food options, preferably from local farmers, the founders hit on something that spoke to their generation.
Fast-forward to today, and it looks as if Sweetgreen might reach its lofty goal of being the so-called "Starbucks of salad." The first Sweetgreen opened in Washington, D.C., It now has over 120 locations and is growing.
Hugely popular with millennials and Gen Z
Sweetgreen has earned a sort of cult-like status among urban employees like tech workers and bankers. This healthy food chain is becoming so popular that people who don't have a Sweetgreen restaurant near them want and anticipate its arrival in their town. This fast-casual restaurant has now become "the place" for millennials and Gen Z folks to go for lunch or dinner, as it checks all the right boxes:
- Locally grown food supply (Sweetgreen works directly with local farmers).
- Celebrity-chef-inspired meals.
- Consistent product.
- Seasonal menus.
- Premium pricing to reflect quality.
- Celebrity endorsements (Gwyneth Paltrow and Martha Stewart).
- Celebrity customers (Selena Gomez and Kendall Jenner, among others).
- Compostable packaging.
- Impressive investors (AOL co-founder Steve Case, Shake Shack founder Daniel Meyer, restaurateur Daniel Boulud, and former Whole Foods co-CEO Walter Robb, among others).
- Long lines (promotes buzz).
- Tech-friendly operation (mobile app for ordering and technology used to streamline supply chains).
Why a confidential IPO?
A confidential filing, a popular strategy among tech companies, allows a company with less than $1 billion in revenue to privately file for an IPO with the Securities and Exchange Commission (SEC). The privacy period allows companies to withhold information from the public (including competitors) until closer to the IPO date, a date that can be chosen sometime in the future when the timing seems most opportune.
The Millionacres bottom line
Since no one knows when Sweetgreen will go public, you might want to be ready to invest when it does. The company has been working with Goldman Sachs on a listing, and Bloomberg reported in May that the IPO could come as early as the end of this year.
No one knows for sure whether this will be a good stock to buy. But Sweetgreen is certainly on track to be a high-growth disruptor in its fast-casual food category. The chain is being compared to Chipotle, a fast-casual restaurant now worth $44.1 billion. According to Sweetgreen co-founder Nathaniel Ru, there's much more on the horizon because "We're just getting started."