Oatly, the Swedish company that pioneered the oat milk category back in the 90s and reinvented itself as a global plant-based food brand in 2013, announced today it has received $200 million in funding on a $2 billion valuation led by the Blackstone Group.
The deal is further validation that venture investments in plant-based alternatives is red-hot despite the pandemic. Alt-dairy is especially hot, as Oatly’s funding comes after a $225 series D in Califia Farms, a maker of a variety of alt-milks, back in January.
The company plans to invest the funding in expanding its production capacity and personnel in North America, Europe and Asia. From the release:
The injection of capital will fund the company’s overall growth plans, which include expansion in current markets and new production plants and related jobs in Europe, the United States and Asia. By bringing facilities closer to consumers, the company will make the Oatly product range more readily available to the growing community of health and environmentally conscious consumers worldwide.
Investment in additional production capacity comes on the heels of the launch of the company’s first production plant last year in Millville, New Jersey. That plant, which cost $15 million to build, produces roughly 750 thousand gallons of oat milk base per month which is, apparently, not enough.
The rapid growth in demand for Oatly shouldn’t be surprising. Prior to the addition of the production plant last year, you could find speculators trying to sell 12 packs of Oatly barista edition online in the US for $200. Add in oat milk’s eye-popping growth in 2019 and you can see why investors have put such a high valuation on a company with an almost cult-like following.
In addition to the Blackstone Group, other investors on the round include high profile individual investors like Oprah Winfrey, Natalie Portman, and Howard Schultz as well as Orkila Capital and Rabo Corporate Investments (the investment arm of Rabobank).
The Blackstone Group investment in Oatly is led by Blackstone Growth, an investment vehicle within the private equity group. Blackstone itself is one of the largest private equity firms in the world, owning a diverse array of companies ranging from dating app company Bumble to hotel chains (they own both the Bellagio Resort and Motel 6 budget motel chain) to drug companies like Ferring.
Blackstone’s investment in a sustainable brand like Oatly is a new turn for a company that saw some controversy in 2019 after one of the firm’s investment holdings, a Brazilian logistics operator named Hidrovias do Brasil, was accused of deforesting the Amazon to help make way for a highway into the jungle to access one of the company’s terminals.
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