Aside from the ongoing market volatility that has affected stocks across the board, overpromised targets and prolonged cash burn are to blame for Laird Superfood's sharp valuation decline since its IPO two years ago.
... [+]Laird Superfood, which was cofounded by famed big-wave surfer Laird Hamilton alongside his friend Paul Hodge, had a stellarabout two years ago, when the public was betting on the plant-based nutrition company’s potential of taking on legacy CPG with its natural and organic offerings, but it took a sharp turn almost immediately after:
The Sister, Oregon-based company, best known for its functional mushroom-infused coffee, has since seen a significant valuation decline despite its steady revenue increase: Its enterprise value hit $346.58 million during fiscal year 2020 — 13.4x of its annual revenue back then, PitchBook showed, and it decreased to $78.49 million the following fiscal year, only 2.13x of its revenue. Price per share also reached its peak in December 2020 at $57.1, and dropped to only $3.15 as of May 6, 2022.
Laird Superfood’s largest backer so far is Danone Manifesto Ventures, the venture unit of the global dairy giant who single-handedly helped the firm raise $10 million in April 2020, and invested an additional $2 million development capital shortly after its IPO....
“We’re a company that’s been growing incredibly quickly — over 40% last year, but we've struggled,” said Vieth. “A couple of things happened there: one is we missed our own targets. We still have aggressive targets laid out in front of us, but we've metered [investors] with regards to the amount of optimism versus the amount of realism largely over the course of 2021, so there was a loss of trust.
However, acquiring and integrating new assets as a relatively small CPG business requires time and thoughtfulness, Vieth acknowledged. He went on to say: “Right now, we're really focused on improving the operation of our business, squeezing out that margin through the opportunities we've identified. As we make our way through that, we'll put our periscope up and take a look at what else is available in the marketplace.
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