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

Have you ever thought Ate at Kava? I Not thereBut fans of the fast-casual restaurant chain serving Mediterranean cuisine recently explained the company on Twitter after it filed Form S-1 for its IPO.

“This is Chipotle for 30+ people who feel they should be eating more fiber,” made fun of Neeraj Agarwal, a resident of a crypto-focused think tank. Opinion was more divided here at TechCrunch with space reporter Ariya Almalhodei calling it “one of [her] favs, “Transportation Correspondent rebecca bellen described it as “fake Israeli food”.


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Whatever is true, many people have eaten at kava. The credit goes to the company which is rapidly expanding its footprint in the United States in the first quarter of 2023 from 22 locations in 2016. Part of that growth came from its 2018 purchase of rival fast-casual chain Zoës Kitchen for nearly $300 million.

Cava isn’t the first venture-backed fast-casual restaurant chain to go public, TechCrunch+ wrote about it: Sweetgreen goes public in late 2021 after establishing an impressive fundraising track record.

Kava’s investor base includes a mix of venture firms (Revolution, Riverbend Capital) and other capital, such as private-equity firm Act3 Holdings and growth equity outlet Kitchen Fund. The restaurant chain’s most recent funding round, T. The $190 million deal, led by Rowe Price Group, is valued at between $1.3 billion and $1.5 billion, depending on which source you look at (PitchBook says the deal was $230 million) .

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

Oh how I missed the IPO filing! Like a cup of cold water to someone in the desert, public offerings offer a wealth of hard data that can help us better understand startup markets and the exit potential of companies. Sadly, because Kava is a fast-casual chain and not, say, a Web 3 company or a software startup, it isn’t comparable to publicly visible tech startups.

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

With SweetGreen’s own IPO and 2023 first-quarter results in the rearview mirror, we can try to land on a valuation range that’s working for Kava. This should give us an idea of ​​how well its supporters will do in its exit. And, we can consider what impact the company’s IPO could have on other startups that want to go public.

sound good? Enjoy Cava-Ort!

a lot of fuss over lunch

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