Salad chain Sweetgreen valued at $5.5 billion as shares soar in New York debut

The Sweetgreen logo is displayed on a banner to celebrate the company's IPO, at the New York Stock Exchange (NYSE)

(Reuters) – Sweetgreen Inc was valued at $5.53 billion after shares skyrocketed 86% in their New York debut on Thursday, as investors embrace companies that focus on healthy and environment-friendly food.

Much of the demand is being fueled by millennials and generation Z consumers, who are more than willing to spend on sustainable products that are also healthy.

Sweetgreen’s shares opened at $52, compared to the IPO price of $28 a share, which was well above its targeted price range of between $23 and $25.

The Los Angeles, California-based company raised $364 million on Wednesday, selling 13 million shares in an upsized initial public offering, compared with its original plan of 12.5 million.

Founded by three college graduates in 2007, Sweetgreen operates 140 restaurants in 13 states in the United States. It offers “earth-friendly” meals made with seasonal and locally-sourced ingredients.

The company’s revenue rose to $243.4 million in the nine months ended September from $161.4 million a year earlier, while loss narrowed to $87 million from $100 million.

E-commerce channels accounted for 68% of Sweetgreen’s total revenue in the last 12 months.

Eleven food and beverage companies went public so far this year to raise nearly $3.83 billion, Dealogic data showed, as firms tapped a boom in the IPO market.

Greek yogurt maker Chobani on Wednesday made public its paperwork for an IPO that Reuters reported could value the company at over $10 billion, while plant-based burger maker Impossible Foods Inc is also preparing for a listing.

Goldman Sachs and J.P.Morgan were among the lead underwriters for Sweetgreen’s IPO.

(Reporting by Mehnaz Yasmin and Sohini Podder in Bengaluru; Editing by Sriraj Kalluvila)