Huel’s boss said that he would be open to selling the meal replacement manufacturer, but admitted that the waning initial public offering (IPO) market in the UK has made it less appealing.
James McMaster, the chief executive of Huel which offers plant-based drinks, powders and snacks for time-pressed customers, said that he was not in a hurry to pursue an IPO, after having recently explored.
He said: “We considered the IPO market, before the markets basically died at the start of 2022. Who knows what will happen?” “Two years ago, people were raving about the great markets and how they might come back in time. . . We are willing to consider a partnership with a bigger company if that is not possible.”
McMaster, a 2017 hire, made the comments as the Hertfordshire based company reported a profitable thanks to an increase in sales. This was just days after privately-owned conglomerate Mars announced that it would buy UK brand Hotel Chocolat.
The global IPO market has been in a sluggish period as a result of a combination of lower valuations and higher interest rates, along with global instability.
McMaster said: “We are very happy with the funding we have now. But we also have investors who invested a long time back. At some point, it will be necessary to realize that.” Let’s wait and see what happens.
Huel’s sales for the period ending July increased by 28 percent, from £144mn in the prior year. It reported a pre-tax profit of £4.7mn compared to a previous loss of £10.6mn.
McMaster stated that Morgan Stanley’s investment arm bought shares from existing investors last month. Around a year ago, it raised £20mn in funding from investors including Highland Europe and Idris Ellba.
Huel, founded by Julian Hearn in 2015, is considered one of the UK’s most promising startups. Hearn still owns half the company, according to Companies House. Huel has a large following on social networks and its products are very popular among fitness-focused consumers.
Huel sells online directly to consumers, but it is also sold in more than 11,000 retail stores around the world. The company has built a new factory in Buckinghamshire, to meet the increased demand.
“We are in a situation where we do not need to raise more money. . . McMaster stated that the business is growing rapidly, making a profit and maintaining healthy margins. We’re plant-based and good for our planet, so that’s a pretty strong selling point.”