Cava’s listing won’t bring back IPOs, but it could deliver welcome investor liquidity


Have you ever eaten at Cava? I have not, but fans of the fast-casual restaurant chain were quick to explain the company on Twitter after it filed a Form S-1 for its IPO recently.

“It’s chipotle for 30+ people who feel like they should eat more fiber,” joked Neeraj Agrawal, a denizen of a crypto-focused think tank. Opinions here at TechCrunch were more split, with space reporter Aria Alamalhodaei calling it “one of [her] favs,” while transport reporter Rebecca Bellan described it as “fake Israeli food.”


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Regardless of who is right, lots of folks have eaten at Cava. That’s thanks to the company rapidly expanding its footprint in the United States from 22 locations in 2016 to 263 in the first quarter of 2023. Part of that growth came from a 2018 purchase of rival fast-casual chain Zoës Kitchen for about $300 million.

Cava is not the first venture-backed fast-casual restaurant chain to go public that TechCrunch has written about: Sweetgreen went public in late 2021 after setting an impressive fundraising track record.

Cava’s investor base includes a mix of venture firms (Revolution, Riverbend Capital) and other capital, such as private-equity firm Act 3 Holdings and growth equity outlet Kitchen Fund. The restaurant chain’s most recent funding round, a $190 million deal led by T. Rowe Price Group, valued it between $1.3 billion and $1.5 billion, depending on which source you’re looking at (PitchBook says that deal was $230 million).

What matters for our purposes is that Cava is a venture-backed company going public at a unicorn valuation.

Oh, how I have missed IPO filings! Akin to a cup of cool water for someone in a desert, public offerings present a wealth of hard data that can help us better understand startup markets and companies’ potential worth at exit. Sadly, because Cava is a fast-casual chain and not, say, a web3 company or a software startup, it doesn’t serve well as a comparable for tech startups looking to go public.

But, this IPO could take a large chunk of invested capital and return it to Cava’s backers and founders. Capital recycling through large exits is a key tenet of the venture model, and with exit volume in the gutter, any liquidity is good liquidity right now.

With Sweetgreen’s own IPO in the rear-view mirror and its Q1 2023 results in hand, we can endeavor to land at a working valuation range for Cava. That will let us estimate how well its backers will do in its exit. And, we can consider what impact the company’s IPO may have on other startups looking to go public.

Sound good? Let’s Cava-ort and have some fun!

Much ado about lunch





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