Oatly Lands $200M in Funding Round Led by Blackstone Growth

In a deal that values the company at nearly $2 billion, Swedish oat milk producer Oatly has secured $200 million in new equity funding in a round led by Blackstone Growth and a group of celebrity investors which includes Oprah Winfrey and former Starbucks CEO Howard Shultz, the company announced today.

The Malmö-based company has been one of the leading brands driving the expansion of plant-based milk alternatives, which grew 6% in 2019. In addition to milk, Oatly also produces other oat-based products for the European market; in the U.S., the brand introduced its first non-milk product, a non-dairy oat-based ice cream, earlier this year.

In a press release, Oatly CEO Toni Petersson described New York-based investment firm Blackstone as playing “an essential role in order to create real sustainable change.”

“We chose to partner with Blackstone Growth because of their tremendous resources and unique reach,” he said. “Our new partners’ commitment to supporting us and furthering of our mission is a clear indication of where the world is heading, which is in a new, more sustainable direction.”Orkila Capital and Rabo Corporate Investments, the investment arm of Rabobank, also participated in the investment round. Along with Winfrey and Shultz, Academy Award winning actress Natalie Portman and Roc Nation, the entertainment agency created by rapper Jay-Z, are also joining as independent investors.

“Oatly is a premier global brand whose product is committed to healthy and sustainable living with significant runway for continued growth to meet rising consumer demand,” said Jon Korngold, Global Head of Blackstone Growth. “We are privileged to partner with Toni and the broader Oatly team to help the company extend its global leadership position in the years to come.”

Oatly remains majority controlled by the Verlinvest-CR Joint Venture, an combined entity of private equity firms Verlinvest and China Resources created in 2016 to invest in mid-sized brands in the healthy CPG space.

Thanks in part to Oatly’s success, oat milk has emerged as one of the hottest segments within plant-based beverages over the past several years, drawing in names like Califia Farms, La Colombe, Silk and import brand Minor Figures

With Oatly already established as a category leader in Europe, the investment suggests that the company will continue to appeal to increased oat milk demand from U.S. consumers. Having broken through to the American market via third-wave cafes, the brand has doubled down on its commitment to coffee over the past year, forming a pact with Stumptown Coffee Roasters for its ready-to-drink cold brew with oat milk, as well as partnering with Starbucks to become the coffee retailer’s on-premise oat milk supplier for a test run in 1,300 cafes in Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri and Wisconsin.

Originally an imported product, Oatly is now produced domestically at a 30,000 sq. ft. facility in Millville, New Jersey, with a second 125,000 sq. ft. plant slated to go online in Ogden, Utah, this summer. The new capital will help Oatly’s expansion in current markets and support the opening of new production plants and related jobs in Europe, the U.S. and Asia, according to the release, with the idea of “bringing facilities closer to consumers.”

“Since our initial investment in 2016, we have supported Oatly in its successful transformation from a Nordic brand into a global movement by delivering unique, high-quality engaging products, based on proprietary, patented oat-technology to the new emerging generation of conscious consumers in a transparent manner,” said Eric Melloul, Chairman of Oatly and Managing Director at Verlinvest. “We are thrilled as this new investment will accelerate the Oatly brand expansion in North America, Asia and Europe and allow for the emergence of a global leader in food sustainability.”