Bougie salad restaurant Sweetgreen raised $150 million, bringing the company’s valuation to $1.6 billion.
The restaurant, known for its locally-sourced made-from-scratch food, now has $478.6 million in funding, according to Crunchbase. The company plans to expand its locations into new areas like Austin, Denver and Miami, according to a statement.
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Restaurants aren’t the type of business one thinks of as attracting venture capital, but a number of food, food-adjacent, and drink companies have pulled in venture dollars and found varying degrees of success. In fact, the $3.3 billion has been invested in food and beverage startups so far in 2019, according to Crunchbase, with 46 percent of those rounds invested in the seed stage.
Let’s take a look.
In the wins category, we have a few food and beverage companies that have made public exits. Chinese coffee startup Luckin Coffee went public in May after raising $550 million in total funding, according to Crunchbase; sandwich chain Potbelly raised $58 million in a private equity round before going public in 2013; and popular frozen yogurt spot Pinkberry raised $27.5 million in its Series A in 2007 before being acquired by Kahala Brands in 2015. All respectable exits for venture-backed food companies. Blue Bottle Coffee also falls into the wins category, as it raised $117 million before Nestle acquired a majority stake in the company.
In terms of companies that seem like a miss, we have grilled cheese restaurant The Melt. The company raised two seed rounds in 2011 with prestigious venture capital firm Sequoia and SV Angel as an investors. The Melt had a goal of opening 500 locations, according to Wired, but now only has seven locations, all in California. It’s a long ways from the goal it set.
Philz Coffee has raised $75 million in total funding to date and has a large presence in Northern California. It counts TPG Growth and Snoop Dogg among its investors, but what’s next for the company is unclear. Go public? Get acquired?
Zume Pizza, known for robot-cooked artisan pizza in a truck while en route to delivery, raised $423 million in total funding. The company pulled in $375 million last year from Softbank’s Vision Fund—something the company shied away from discussing as the Vision Fund was shrouded in controversy. Softbank also bet big on companies like Uber and WeWork, thought those investments haven’t had the best returns.
It’ll be interesting to see what happens with Sweetgreen, given how hit-or-miss food startups can be. We’ll certainly be watching.
Illustration Credit: Li-Anne Dias