Impossible Foods Stock: Are You Ready to Invest in the IPO?
In May of 2019, Beyond Meat hit the public markets at an IPO price of $25 per share. Within minutes of trading, its share price had risen to $46 per share, and within two months they soared past $200 per share.
Since that post-IPO run, shares of Beyond Meat have settled down. As of February 2021, its shares trade for closer to $160 per share. Yet, even that price points toward a company with significant potential for growth ahead.
What is Impossible Foods?
Impossible Foods is a leader in creating plant-based alternative foods. The company has deals with Starbucks to sell its sausage as well as Burger King for its burgers.
Expected IPO Date:
2022 or later
- Impossible Foods’ last round valued the company at $4 billion.
- The company is not yet public, but comments from its CFO point to the potential for an IPO in the coming years (read more below).
- Impossible Foods has struck a number of important partnerships. The company has deals with more than 15,000 restaurants and 17,000 stores.
- In the past year, the number of supermarkets carrying its products has risen by 113X.
- Impossible Foods faces competition from not only Beyond Meat, but larger food brands that are rapidly racing into this category.
- The company will be richly valued in an IPO. Today Beyond Meat trades for 25 times sales, a figure that’s significantly higher than most food companies.
Plant-based alternatives for food are a simply massive market, and the early leaders today are striking huge distribution deals that could leave them in the driver’s seat for the coming decade.
If you’re looking for another market leader, look no further than Impossible Foods. The company is still private today, but as you’ll read below, there’s reason to believe an IPO could be coming sooner than later.
Impossible Foods News & Analysis
- February 4: Beyond Meat Rises as FDA Lawsuit Targets Rival Impossible Foods
- November 28: Impossible Foods CEO Says Beyond Meat Is Not a Competitor
- October 26: Impossible Foods Launches Major Canadian Grocery and Home Delivery Alliance
- August 14: Beyond Meat’s Rival Impossible Foods Gains $200M More in Funding; No IPO Date Set
- July 3: 3 Differences Between Beyond Meat and Impossible Foods
The Big Picture: Why Impossible Foods Could IPO in 2021
Humans are starting to seriously think about what’s on our plates, and from the health effects to the broader environmental impacts, many are starting to steer away from an animal-heavy diet.
Until recently, the trade-offs were significant as traditional plant-based substitutes lacked the taste and complexity of meat, and most consumers were unwilling to make their meals less flavorful, even if it was better for the planet.
Enter Impossible Foods. Founded by Stanford biochemistry professor Patrick O. Brown to take on traditional animal farming, the company aimed to create a plant-based product that would be comparable in taste to animal-based protein.
The company struck gold when it launched its signature Impossible Burger in 2016.
In many ways, you can think of Impossible Foods as less of a food company and more of a biotech company looking to disrupt the food industry with plans to create more plant-based meat analogue products and even a line of milk. This will be an expensive endeavor.
CFO David Lee tipped his hand in 2020 that the company might be considering filing for an IPO or SPAC sooner rather than later, noting “the need for every option to fund this global operation,” but demurred on offering a timeline for Impossible Foods stock to hit the public markets.
Bull Case: Why Would I Want to Buy Impossible Foods’ Stock?
For one, the immense size of the opportunity. According to research, the global meat market had total revenue of roughly $1.2 trillion in 2019 and is expected to more than double to $2.7 trillion by 2040 as more join the global middle class and increase their consumption of protein.
At the same time, growing awareness of health and environmental issues will shift consumption to plant-based meat alternatives.
Against that backdrop, Impossible Foods is less of a traditional food company and more of a disruptor in this space. Impossible Foods was founded by a biochemist and its plant-based fake blood (dubbed heme by the company) was a significant step in the evolution of plant-based meat analogue.
Ultimately, the decision comes down to taste and it appears Impossible Foods is getting a thumbs up from consumers. Impossible Foods is quickly picking up shelf space at local grocers and signing high-profile deals with restaurants like its agreement to bring the Impossible Whopper to Burger King and a deal with Starbucks to have the Impossible Sausage in its U.S. stores.
While Burger King and Starbucks might grab headlines, the company is forging deals across many restaurants, increasing its footprint from 40 U.S. restaurants in 2017 to more than 15,000 worldwide currently.
But it’s not just restaurants. Last year Impossible Foods inked a deal with Kroger to have its line of burgers in nearly 17,000 stores.
The world is experiencing a huge increase in the global middle class, which will put demand on protein consumption across the board. Plant-based proteins will continue to pick up market share at the expense of animal-based protein and Impossible Foods will be at the forefront of this massive shift.
Impossible Foods has an audacious goal to make the meat industry “obsolete” in 15 years, but it won’t have to accomplish this to be successful.
Bear Case: Why Pass on Impossible Foods’ Stock at IPO?
The first is direct competition, both from pure-play plant counterpart Beyond Meat and from plant-based alternatives from established food companies like Kellogg’s Morningstar Farms and Kraft Heinz’ Boca Burger.
While it’s widely considered Impossible Foods and Beyond Meat are next-gen plant-based proteins, consumer taste and brand awareness are often shaped by marketing.
Alternatives to these non-meat foods are also a risk. Simply put, humans love meat! Traditional animal-protein producing companies like Tyson and JBS essentially dominate the marketplace and, in addition to taste concerns, they have the scale to compete and win on price.
Even though Impossible Foods and Beyond Meat are working to lower costs, they’re not able to offer lower costs than conventional animal meat at this point.
Finally, while $4 billion might not seem like an expensive valuation for private companies in the age of tech unicorns, it is when compared to traditional animal meat companies. Tyson Foods has a market capitalization of $25 billion and Pilgrim’s Pride is valued at $5.5 billion despite making billions more in revenue per year than Impossible Foods.
Can I Buy Impossible Foods’ Stock Now?
Impossible Foods is currently a privately-traded company, meaning accredited investors – those that meet qualifications set by the Securities and Exchange Commission for net worth ($1 million, not including primary home) or annual earnings ($200,000 for two consecutive years, $300,000 jointly) – are able to buy shares in the company at this point.
Even if you’re lucky enough to qualify, it might be (pun intended) impossible for you to find Impossible Foods stock until the company comes to market. Unlike stocks that trade on a public exchange that are available for all investors willing to pay the stock price, privately held shares are limited.
In addition, the minimums on broker sites for privately-held companies often require minimum purchases of $100,000 or more.
Founder and CEO Patrick O. Brown has prioritized providing shares of Impossible Foods stock to a handful of venture capital firms and to high-profile billionaires and/or celebrities, with notable names like Microsoft founder Bill Gates, Serena Williams, Jay Z, and Katy Perry participating in the March 2020 Series F funding.
Impossible Foods Stock: Who Owns It Now?
Impossible Foods was founded by Stanford biochemistry professor Patrick O’ Reilly Brown in 2011 and he remains the company’s CEO to this day.
Impossible Foods has a star-studded list of backers. Bill Gates was among the earliest to give Impossible Foods funding, contributing to the company as early as October 2015 and has added capital on follow-on rounds.
In one of the higher-profile funding rounds perhaps ever, Impossible Foods raised $300 million in 2019 by taking money from a host of celebrities that spanned the worlds of music, sports, and television. In addition to the names mentioned above, Jaden Smith, Trevor Noah, and Zedd participated in the round.
Boasting quite a few high-profile owners, it’s understandable that many retail investors are itching to buy Impossible Foods stock once the IPO occurs.
Impossible Foods Price Chart: How Much is it Worth Now?
As a private company, Impossible Foods doesn’t have to disclose its current stock price to non-owners. The company’s share price was reportedly $16.15 in its most recent round, valuing the company at slightly more than $4 billion.
Impossible Foods has undergone seven rounds of funding and the stock price changed every time, and it will almost certainly be higher at the time of the IPO.
According to Craft, here’s a list of each funding round along with the lead/notable investors, the funding amount, and the valuation.
|C||GV Management||$40 million||Undisclosed|
|D||Horizons Ventures, Khosla Ventures||$108 million||Undisclosed|
|E||Khosla Ventures, Temasek Holdings||$91.5 million||Undisclosed|
|F||Khosla Ventures, Temasek Holdings, Khosla Ventures||$914 million||$2 billion|
|G||Temasek Holdings, Coatue||$200 million||$4 billion|
|Total Announced Funding to Date||$1.39 billion|
The company has taken approximately $1.4 billion in outside funds and has a current market value of approximately $4 billion.
With Beyond Meat fetching a market value of around $10 billion as of February 2021, its likely Impossible Foods would see a significantly higher value upon its IPO.
When Can I Buy Impossible Foods Stock’s IPO?
There have been mixed messages coming from Impossible Foods’ C-suite. CEO Patrick Brown said back in 2019 that it wasn’t the right time to go public. But more recently, CFO David Lee signaled a possible change in thinking soon after receiving a $200 million round of funding in August 2020.
Lee stressed “the need for every option to fund this global operation.”
It’ll ultimately be Brown’s call, but the IPO might be sooner than his ideal timeframe. Impossible Foods is in an aggressive cycle of investment and growth and needs money to finance its expansion.
The easiest way for a company to raise money is through the public markets, issuing shares to finance its growth expenditures.
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What is Impossible Foods’ Stock Symbol?
Private companies like Impossible Foods do not have stock symbols. Stock symbols exist for publicly traded companies that list on stock exchanges. The stock symbol allows investors to quickly determine the investment performance of the stocks they own amid thousands of other tickers.
Impossible Foods’ privately traded stock doesn’t have a symbol because it’s simply not needed.
Although Impossible Foods does not have a stock symbol yet, we can guess what the symbol will eventually be. Like competitor Beyond Meat, it’s likely Impossible Foods stock will opt for a NASDAQ exchange listing.
Historically, the “Big Board,” or New York Stock Exchange, has listed food companies, with Kellogg and Tyson both claiming NYSE as their exchange of record. However, newer biotech companies and disruptive companies have flocked to the NASDAQ.
Impossible Foods exchange isn’t that important to investors but might change the stock symbol. Companies listed on the NYSE tend to use symbols of three letters or less – TSN for Tyson Foods and K for Kellogg – while NASDAQ stocks often have four letters (BYND for Beyond Meat).
Impossible Foods has a choice of symbols like IMPF and MPFC to choose from once it goes public.
Key Impossible Customers: Where Can You Find Their Products?
Earlier we discussed how a string of major customer wins could help propel Impossible revenue in the years ahead, here’s a look at some of their most impressive customer wins.
- Burger King: Selling both Impossible Whoppers and Impossible Croissanwhiches
- White Castle: Selling Impossible Sliders
- Starbucks: Featuring an Impossible breakfast sandwich
- Red Robin: Most locations now carry Impossible options for their line of burgers
- Little Caesars: Offers Impossible sausage on its pizzas
This list is nowhere near comprehensive as the company continues signing up new customers but gives a look at the varied franchises that are making use of Impossible’s offerings.
Impossible Foods Stock: Should You Buy the IPO?
Impossible Foods has not provided public investors information related to their financial position, which is customary for private companies. Additionally, we do not yet know what the valuation Impossible Foods will be seeking when the company files for its IPO.
If Impossible Foods goes public in 2021, it’s almost a certainty it will be an expensive stock for its industry. Reports are the company expected revenue to come in at $90 million during full-year 2019, pointing to a company trading at around 45 times revenue.
However, keep in mind revenues can grow quickly in this industry as massive distribution deals are struck. Between 2018 and 2019, Beyond Meat’s sales skyrocketed from $87.9 million to $297.9 million, a growth rate of 239%. Today, Beyond Meat is valued at about 25 times its trailing sales.
Still, Impossible Foods’ valuation is already at a significant premium to meat producers like Tyson and Pilgrim’s Pride that trade below the overall market with valuations of 0.6 times sales and 0.42 times sales, respectively. It’s likely Impossible Foods’ valuation will only increase as the company will come to market at a premium to the last round of funding.
Studies show that IPOs often underperform established stocks in the long run due to overly optimistic investors asking high initial prices, so a valuation-based argument to buy Impossible Foods stock doesn’t exist.
However, if you believe in CEO Brown’s vision that Impossible Foods will make the animal-based protein market obsolete within the next two decades this could eventually be one of the biggest winners during that period.
It’s no wonder why investors are eagerly awaiting the day when Impossible Foods stock hits the public markets.
Frequently Asked Questions
Is Impossible Foods publicly traded?
As of February 2021, the company is not yet publicly traded. Statements from the CFO of Impossible Foods point to the potential for an IPO in the coming years, but no timeline has been stated.
How much is Impossible Foods worth?
Impossible Foods’ latest funding round valued the company at $4 billion. It’s reported each share is now worth $16.15. However, the company is still private so its shares are only available on secondary marketplaces.
Does Bill Gates own Impossible Foods?
Yes, Bill Gates participated in the company’s Series F funding in March 2020 along with Jay-Z and Katy Perry, so he owns shares of the company.