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Shares of Swedish oat milk brand Oatly soared nearly 30 percent during the company\u2019s public market debut Thursday.<\/p>\n
The stock began trading around 11:45 a.m. ET at $22.12, about 30 percent above the IPO price, giving the company a valuation of $13.1 billion. The Malmo, Sweden-based company is trading on the Nasdaq under the ticker \u201cOTLY.\u201d<\/p>\n
The oat-milk maker priced its IPO on Wednesday evening at $17 per share, at the top of its indicated range, giving it a valuation of $10 billion and raising over $1.4 billion from the sale of new and existing equity.<\/p>\n
The company sells a milk substitute made from oats. It\u2019s grown rapidly since its US debut five years ago, riding a wave of interest in plant-based foods, particularly among health- and sustainability-conscious millennials and Gen Z consumers. <\/p>\n
As of the end of 2020, Oatly products were sold in about 8,500 retail shops and nearly 10,000 coffee shops in the US, according to the company\u2019s regulatory filings.<\/p>\n
The market for plant-based alternatives is competitive, with start-ups like Beyond Meat and Impossible Foods already in the space, and established food companies like Nestle and Target announcing plans to pursue plant-based food options. And even within the milk alternative market, Oatly faces steep competition with deep-pocketed rivals like Danone and Unilever. <\/p>\n
But Oatly has largely managed to distinguish itself with offbeat marketing, in particular. The company debuted a memorable low-budget commercial at this year\u2019s Super Bowl, which featured Oatly CEO Toni Petersson sitting at a piano in the middle of a field singing, \u201cWow! Wow! No Cow!\u201d <\/p>\n
After poor reviews, the company gave away Tee-shirts that read, “I totally hated that Oatly commercial.”<\/p>\n
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The company\u2019s cartons and advertising on billboards, busses and elsewhere also feature over-the-top claims about the benefits of oat milk.<\/p>\n
\u201cThink cow’s milk. Without the cow and the milk part. And 80% fewer greenhouse gas emissions: That’s all,\u201d reads one advertisement featured in the company\u2019s regulatory filings. <\/p>\n
In addition to oat milk, the company also now sells some oat-based ice cream, yogurt, cooking creams and spreads. <\/p>\n
The company has scored some big-name investors. Last July, a group led by private equity giant Blackstone and that included Oprah Winfrey, Natalie Portman, Jay-Z’s entertainment agency and former Starbucks CEO Howard Schultz invested $200 million in Oatly. <\/p>\n
That investment spurred some backlash for Oatly from protestors who criticized the company’s ties to Blackstone, which has investments in a handful of companies that don’t share Oatly’s vision around sustainability. <\/p>\n
The investment nonetheless earned Oatly a $2 billion valuation, even though the company has yet to post a profit. While sales more than doubled from 2019 to hit $421.4 million last year, it posted a loss of $60.4 million as it invested in product development, new factories and marketing, according to its regulatory filings.<\/p>\n