Investors Fill Up on Salad—Sweetgreen Raises $150 Million

Sweetgreen, the fast-casual salad chain, has raised $150 million in its latest round of financing, bringing the valuation of the company to $1.6 billion, solidly in “unicorn” territory. Lone Pine Capital and D1 Capital Partners co-led the funding round.

The Washington, D.C.-based company plans to use the capital to expand its reach into more U.S. cities, such as Denver, Austin and Miami, with additional retail stores. Another area of expansion: “Outpost” locations, which are designated areas in office buildings where people can pick-up the Sweetgreen’s salads they’ve ordered online.

The company’s trio of 30-something founders said the plan was to operate 110 brick-and-mortar stores by the end of this year and 120 more of its Outpost spots, according to an interview with Fortune in July.

“We’re building a new type of food company and a sustainable supply chain to challenge how we think about real food, explore innovative new retail formats, and elevate the consumer experience,” Jonathan Neman, CEO of Sweetgreen, said in a statement announcing the deal. “This foundation will allow us to push boundaries and broaden our impact, doing even more with our suppliers, partners, and technology so that together we can bring about industry-wide change.”

The company will also be rolling out a delivery service through its app in 2020.

Sweetgreen has now raised over $500 million in funding since its inception in 2007. Its valuation crossed $1 billion in November when it brought in $200 million in a previous financing round.

When companies like Sweetgreen are valued this high, it opens up yet more doors for investment opportunities, said Anat Alon-Beck, a professor at Case Western Reserve University who studies these “unicorns” — private companies whose values exceed $1 billion.

“Once you cross that threshold and you become a unicorn, a lot more investors come forward and say, ‘Hey, I want more of that pie,” Alon-Beck told Fortune. “Once you’re on that list, you’re golden — you’ve made it into the club.”

Sweetgreen has been a leader in the booming vegetable-centric meal market. Technomic, a research and consulting firm specializing in the foodservice industry, estimates Sweetgreen revenues topped $158 million in 2018. By comparison, it had Chopt ranked second with revenues of $98.1 million.

The overall market has seen an uptick in sales since 2014 with an almost 130% increase in a four-year span, to $686 million a year ago. These numbers pale in comparison to burger giants—McDonald’s drew in $8 billion in revenue last year—but experts say customers are turning toward all-natural foods.

“It’s all about this path to purity,” said David Portalatin, food-industry analyst for the NPD Group, a market research firm, told Fortune in July. “Consumers want foods that are real, authentic, minimally processed. These companies are meeting those needs for consumers and making it convenient.”

Co-founded by Neman, Nathaniel Ru and Nicolas Jammet, Sweetgreen has grown rapidly in its 12 years by leveraging its ability to meet its customers’ needs by getting inventive about distribution and delivery channels. It’s also infused technology into the fabric of the company.

Sweetgreen plans to utilize blockchain technology to give patrons a front-row seat to its supply chain, meaning customers will be able to see from where their food is sourced.

All this has investors excited about Sweetgreen’s potential growth, especially if the company ever decides to go public.

“We’re investing here with the hopes that this will be a public company one day,” Kelly Granat, a portfolio manager at Lone Pine Capital, said in an interview with The Wall Street Journal.