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Oatly's IPO Could Fetch a $10 Billion Valuation This Week. Here's What Investors Need to Know

By Danny Vena - May 19, 2021 at 3:35PM

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The plant-based milk unicorn could be the next blockbuster IPO.

Plant-based milk substitutes are all the rage right now and Oatly is leading the charge. The company is a pioneer in the field and the largest seller of oat-based milk in the world. Oatly is also a favorite milk substitute among Starbucks customers, which is at least partially responsible for its popularity. 

Oatly has scheduled its initial public offering (IPO) for later this week and will list its American depositary shares (ADS) on the Nasdaq Stock Market using the ticker "OTLY." The stock has been priced in a range of $15 to $17 per share, with each ADS representing one ordinary share. The company will offer 64.89 million shares and raise as much as $1.1 billion from the offering, valuing Oatly at as much as $10 billion. 

Oats scattered on a table in front of a glass and a pitcher of oat milk.

Image source: Getty Images.

The company was already a big hit in its native Sweden before taking the U.S. market by storm. By joining forces with Starbucks and Dunkin' coffee shops to provide its plant-based milk substitute, Oatly quickly garnered significant name recognition. It offers a wide variety of alternative products for those looking to avoid dairy, including milks, ice creams, yogurts, and spreads.

Oatly has a large and growing customer base, selling in 60,000 retail locations and 32,200 coffee shops across more than 20 countries. The company offers its products at a host of major retailers including Walmart, Target, Amazon's Whole Foods, and Kroger, and continues its aggressive international expansion

For the year ended Dec. 31, 2020, Oatly generated revenue of $421.4 million, which surged 106% from $204 million in 2019. The company's losses also climbed, with a loss of $60.4 million, worsening from a loss of $35.6 million the year before. That trend continued in the first quarter, with revenue of $140 million, up 66% year over year, and a loss of $32.4 million that nearly quadrupled. 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Amazon and Starbucks. The Motley Fool owns shares of and recommends Amazon and Starbucks. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, short January 2022 $1,940 calls on Amazon, and short July 2021 $110 calls on Starbucks. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$139.07 (-0.32%) $0.45
Target Corporation Stock Quote
Target Corporation
TGT
$173.05 (-1.31%) $-2.29
Starbucks Corporation Stock Quote
Starbucks Corporation
SBUX
$88.55 (0.23%) $0.20
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$142.30 (0.14%) $0.20
The Kroger Co. Stock Quote
The Kroger Co.
KR
$49.62 (2.20%) $1.07

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