Oatly has to raise money again

How did Oatly get here and will the company be eventually acquired?

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Just another cool $300 mil

On Tuesday, Oatly made an SEC filing to announce plans for raising up to $300 million, pending shareholder approval. This is a significant capital raise just 20 months after Oatly’s billion-dollar IPO in May 2021.

But why?

Exceptional products making exceptional losses

From the first two parts of our Oatly coverage, it is clear that Oatly is a genius company in branding and marketing, but faces steep challenges in scaling its manufacturing capacity across the globe.

This combination has created a global brand loved by consumers but consistently loses huge amounts of money. (Disclaimer: I am sipping a cup of cappuccino made with Oatly’s oat drink while writing this. And it’s already my second cup before 11 am.)

The result - Oatly is quickly running out of cash and facing a life-and-death point in 2023. It may not seem this way because its marketing team is still producing brilliant ads everywhere.

Photo by Arno Senoner on Unsplash

Burning Cash Unsustainably

As of the end of Q3 2022, Oatly held cash and cash equivalents and short-term investments of $120.3 million and total outstanding debt to credit institutions of $4.4 million. However, in the trailing 12 months (“TTM”), Oatly had burnt $280 million of cash from operations and another $257 million from Capital Expenditure. At this pace, Oatly would run out of money in Q1 2023 from operations alone.

So far, Oatly has taken the following steps to tackle the cash flow crisis: