After a year of record activity, the IPO market seems to be warming up for a busy 2022. The upcoming stock market debut of Reborn Coffee Inc. would be one of the closely followed IPOs of the year.
The California-headquartered company operates retail outlets serving premium coffee. Last week, Reborn revealed plans to become a public company through an initial public offering, though the exact date of the offering is not yet known. The company has neither announced the number of shares being offered and the offer price.
Nasdaq Listing
If everything goes as planned, the stock will list on the Nasdaq stock exchange under the ticker symbol REBN. The sole book-runner in the offering is EF Hutton, a unit of Benchmark Investments.
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Reborn was founded in 2015 by Jay Kim, who has served as the chief executive officer since then. According to the company, the Reborn Wash Process – in which magnetized water is used to wash the raw coffee beans — is the key to creating the special flavor of its coffee. The process adds to the quality of the final product, thereby differentiating the brand from others in the market.
As of September 30, 2021, Reborn operated seven company-owned locations. It is looking the expand the network through franchising, which is expected to begin early this year. Also, plans are afoot to open around 40 own outlets next year.
High Demand
The company’s addressable market is expected to grow steadily in the coming years, and the business stands to benefit from the growing demand for branded and premium coffee varieties. However, it would not be an easy task to expand the business in a market that is ruled by the likes of Starbucks Corp. (NASDAQ: SBUX) and Canada-based Tim Hortons.
Read management/analysts’ comments on quarterly reports
Reborn generated total revenues of about $793,000 in fiscal 2020, which is up 28% from 2019. More recently, the company reported $1.57 million in revenues for the nine months ended September 30, 2021, sharply higher than the previous year’s number. Meanwhile, net loss widened to $1.1 million from $0.75 million during the fiscal year. The loss for the nine-month period was $2.58 million, compared to a loss of $0.85 million in the prior-year period.
IPO Spree
Of late, coffee brands and fast-food chains have developed a penchant for going public, to take advantage of the growing popularity of specialty beverages and snacks. In September, Oregon-based drive-thru coffee chain Dutch Bros went public through a blockbuster IPO, raising about $484 million. The stock made strong gains since then and the company’s valuation has crossed $2 billion.