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Oatly’s $10 billion IPO pours one out for the dairy industry

Betting on an animal free future for food and beverage seems to be a profitable proposition as shares of Oatly, a maker of oat-based milk alternatives, soared in their first day of trading.

Marking a windfall for celebrity investors like Oprah Winfrey, Natalie Portman, and Sean Carter (the impresario better known as Jay-Z) the company’s public offering shot up 30% in opening day trading.

The company’s $10 billion valuation now rivals that of fellow traveler Beyond Meat, a purveyor of pork and beef replacements, that also saw its shares soar in public market trading.

The reception from investors is mirrored in consumers’ surging demand for alternatives to dairy and meat.

Last night, the Mälmo, Sweden-based company priced its shares at $17 and when trading began for the company under the ticker OTLY, the share price had surged to $22.12.

The stars seem to be aligned behind animal alternatives. Drake digs it (he’s a recent investor in the $40 million funding of a plant-based chicken company called Daring Foods). FootPrint Coalition Ventures (the venture arm of FootPrint Coalition) has taken its own bite out of the market, investing as part of a big round for Atlast Food Co.

In the last week alone the Daring Foods investment and a whopping $170 million investment in Good Meat mean that plant and cellular agriculture companies had a very very good week. Investments from public and private markets could far outstrip the $3.1 billion that alternative foods raised in 2020.

“Long term, it’s an opportunity for us to create a fantastic shareholder base,” Oatly’s chief executive, Toni Petersson, told The New York Times. “So E.S.G. was definitely a huge, huge part of it — so we’re excited, we’re really excited, about the outcome here.”

Big institutional investors like the private equity giant Blackstone, along with a joint venture between the Chinese government and Verlinvest, a Belgian firm backed by the scions of the Anheuser-Busch InBev fortunes, also stand to gain from the public offering.

Given the warm embrace that Oatly has received from consumers — with sales skyrocketing to $420 million in 2020 from $204 million in 2019, the real winner might be the planet.

“This is about gaining market share,” Petersson told The New York Times. “This is about leading a movement forward.”

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