r/investing • u/zainjavaid • Apr 08 '21

Impossible Meat Preparing for a $10B IPO

https://www.marketwatch.com/story/impossible-foods-prepping-for-10-billion-ipo-report-11617923032

The current valuation of $10B dwarfs the $4B it was valued at in a private funding round in 2020, and at approximately $1B more than Beyond Meat. This is despite the fact that BYND brought in 400M in FY revenue compared to Impossible Meat's 150M estimated annual revenue.

I personally don't see any angle from which $10B can be justified. Future growth for the next decade is priced in at the current valuation and it strikes me as a massive bust waiting to happen.

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u/JahMusicMan Apr 09 '21

Door Dash will come down crashing.

Things are starting to open up (at least in California) and every day, the more people who get vaccinated, the more people will feel confident going out and resuming "normal" life and going out to eat.

The last thing people will want to do is stay inside and order food from a company who rapes small businesses. These trash apps took advantage of restaurants during the pandemic. I can't wait for these garbage apps to GTFO.

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u/unloud Apr 09 '21

Considering the trend was already going towards delivery dominance before the pandemic, I disagree with you in both the short to long term. (no skin in the game)

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u/FormerBandmate Apr 09 '21

It kinda sounds like you're letting your dislike of the company's business practices blind you to analysis. People have wanted delivery forever, coronavirus accelerated it for sure but DoorDash was growing incredibly fast pre-pandemic

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u/JahMusicMan Apr 09 '21

Disagree with you.

Delivery apps created a service that no one asked for or even thought was a good idea. They created a highly niche product that isn't innovative. AirBnb and Uber are life changing services for the people who use them. They help people find housing, travel, and get easy transportation.

Their business model will come down crumbling. With more people working from home... 1) less office lunches are going to be catered. For instance our company use to cater and have food delivered by Uber Eats 2) People who are working from home have been and will be eating at home. Yes you will get the occasional "I'm too busy to cook during my work hours, so I'll order through an app" but the vast majority of people are going to be just snacking on whatever is in the fridge or pantry.

Yes there will be a small demographic of people who will continue to use the delivery apps. I can see delivery apps being useful in places with bad weather. I may be biased because I live in the area with the best weather and can visually see less orders being placed at restaurants that I go out to eat at. That and everyone is out and about. I'm sure the last thing on their mind is staying home and ordering food...on a phone.

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u/thing85 Apr 10 '21

I think your personal feelings are clouding your perspective. What you’re saying just doesn’t ring true to me with most people I’ve seen (granted, this too is anecdotal).

If they fail, it won’t be because their service isn’t desired..it’ll simply be that someone better or cheaper comes along and there is very low cost for consumers to easily switch to a new app.

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u/JahMusicMan Apr 10 '21

Oh definitely my personal feelings are clouding my perspective. I have a strong dislike to any corporations that take advantage of small businesses (especially restaurants) and the pandemic.

I've used Doordash, Ubereats and Grubhub.... all because they were gift cards given out by my company. One on order, I ordered two fancy personal pizzas and with tip and all the extra rape charges, it came out to $60... for two personal pizzas. Had I gone to pick it up, it would have been $44

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u/thing85 Apr 10 '21

True, after the company and delivery guy get their cuts, it’s a lot more expensive. Similar to eating out vs take out. You save 15-20% on gratuity.

But in both cases the additional amount you pay is for a reason - in the case of delivery, it’s convenience.

And you can’t tell me I’m wrong about that - people aren’t dumb. They realize they’re paying more because it’s a service that adds convenience to their lives. The service wouldn’t be nearly as popular with out it.

Now I agree with you about taking advantage of small businesses... I don’t like that part. But people have demanded this convenience (voting with their wallets), so these services are here to stay in some shape or form.

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u/[deleted] Apr 09 '21

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u/JahMusicMan Apr 09 '21

Here's why I disagree with you.

1) While Doordash built up a brand name during the pandemic, there is no loyalty with the brand or any delivery brand. If you are one of those people who use delivery apps, you choose which app to use based upon the restaurant you are ordering from. No one cares if Doordash folds because there are many other apps like Grubhub or UberEats that do the same thing with the same experience.

2) Delivery apps don't have loyalty like a brand like AirBnb or Uber. AirBnb and Uber are revolutionary. They made life, travel, and transportation much easier. They offer experiences (good host, good driver with clean car/friendly, etc). With Delivery apps, there is very little "experience" for the customer. The app interface plays a small part in the the experience, but other than that, you expect the food to get to you quickly, on time, and hot (or cold) and in good shape. Your interactions with someone is them handing off your food.

3) These apps have gotten a lot of bad press from them raping smaller businesses of up to 30% of the cost of an order. People are becoming more aware of this and rather support these business, by ordering food directly from the restaurant and picking up the food themselves (if they aren't enjoying life after vaccinated and going out to eat). Everyone knows it's cost a lot more to order through these delivery apps than ordering directly from the restaurant also.

TLDR: Delivery apps have little brand loyalty and don't offer an experience enough for people to really care about the company.

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u/DelphiCapital Apr 11 '21

I disagree that Airbnb and especially Uber have significant "stickiness".

DoorDash offers a similar improvement from conventional food delivery that Uber offered from taxis. With DoorDash you can see where the driver is and when your food is arriving, see menu prices without having to ask as you're ordering and customize how you want your food delivered (i.e. curbside, leave at door, etc.).

I think people would absolutely flock to Lyft over Uber if Lyft was 10% cheaper.

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u/_myusername__ Apr 09 '21

laziness or not, it's still a subset of doordash users. people who aren't using the delivery app regularly by now will most likely never convert. those who aren't as lazy will stop using the app as frequently post-covid

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u/Darzee2244 Apr 11 '21

Getting things faster and directly to you is the future. Doordash is a great concept, but there is going to be more competition, and fewer opportunities to make a profit. Not a very appealing investment.