Oatly banks on Gen Z and Millennials in its yet-to-be-profitable IPO
You could say Oatly is milking the trend toward sustainable foods.
The Oprah- and Blackstone-backed beverage company filed for an initial public offering on Monday, revealing rapid growth alongside continued losses.
Last year, revenue more than doubled to about $421.4 million amid a loss of $60.4 million, with the latter figure growing about 70% compared to the same period in 2019.
Founded in the 1990s, the company hit stride in recent years as more consumers preferred brands that promote health and sustainability. Oatly has centered itself within that shift, with one version of its label declaring in prominent bold font: “We promise to be a good company.”
And while the company has yet to turn a profit, it is banking on that trend accelerating, driven by the next generation.
“The growing concerns for the environment and interest in health and nutrition have started to drive real, scaled behavioral changes around consumer purchase choices,” the prospectus read. “Generation Z and Millennials will become the dominant global generations in the coming years.”
A fascinating tidbit: While many headlines have touted Blackstone and Oprah’s investments in the firm, neither are named as an investor with greater than a 5% stake in the business. Instead, one of Oatly’s largest investors is China Resources, a state-owned conglomerate with a roughly 30% stake through a joint venture.
In its IPO prospectus, Oatly makes it clear that it’s aware of ongoing tensions between China and the U.S. As part of an agreement with its shareholders, Oatly noted that it may seek an additional listing in Hong Kong if the U.S. government seeks to force China Resources to divest from the company or not appoint a director to the board.
The company will also seek a listing in Hong Kong if it generates over 25% of its revenue from sales in the Asia Pacific region for two consecutive quarters two years after going public in the U.S. About 12.7% of its revenue came from Asia in 2020.
PAUSE ON MENOPAUSE: Here’s a fascinating startup that is looking to buy an extra 10 to 15 years for women before they hit menopause.
Per my colleague Beth Kowitt: “Celmatix is creating a drug program that would effectively slow the depletion of a woman’s ovarian reserve, or how many follicles she loses each month. Beim equates a woman’s follicles—which have the potential to turn into eggs—with a bank account: Every woman is born with a different number, and she depletes it a different rate, depending on everything from genetics to environmental exposure. For example, women who smoke deplete their ovarian reserve more quickly.”
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