Should MrBeast Take MrBeast Burger and Feastables Public?
Youtube megastar Jimmy Donaldson, or MrBeast as he’s better known, is known for videos of over-the-top, sometimes life-threatening challenges featuring himself, his friends, and once in a while strangers. His viral antics — which clock in tens of millions to over 300 million views each video — are also known to come with enormous rewards, including prizes ranging from $10,000 to $1,000,000.
His main channel was 2022’s most-subscribed YouTube channel with over 128 million subscribers as of this writing. He’s used this massive reach to branch out into other YouTube channels (he has about a dozen more, with millions of followers each), for philanthropic efforts, and to develop his brand outside of the platform.
In 2020, he launched MrBeast Burger, a ghost kitchen food chain that delivers to locations in the US, Canada, and the UK. In September 2022, it expanded into brick-and-mortar operations, opening its first store in New Jersey. In January last year, he launched the chocolate snack brand Feastables.
Both ventures have so far been successful, with Feastables reportedly making $10 million in its first few months, and MrBeast Burger sharing “over $100 million in revenue with restaurants across America.”
But Donaldson, who’s currently the highest-earning YouTube creator with $54 million annually from his content alone according to an estimate from Forbes, has been itching to take it further and make it bigger.
In October last year, Axios reported that he was seeking $150 million at a $1.5 billion valuation for his brand. While the private fundraising was never confirmed, the YouTube creator has been mulling over an IPO for a while.
“Yes, I just see MrBeast IPO go like it’s crushing. Not in the next few years, but eventually. Could you imagine we did IPO and have a couple of billion? The kind of videos we could make. So crazy it would be,” he once said in an interview in October last year.
It seems though that he wants to do it sooner rather than “in the next few years.” On Twitter last week, he floated the idea of taking these two still “relatively small” food ventures public so his followers can “share in the growth.”
Many of those who replied tried to discourage the YouTube creator, saying the headache wouldn’t be worth it. Some suggested he go the Reg A+ route, through which he can raise up to $75 million in 12 months without the heavy expenses, resources, and reporting headaches of a regular IPO.
Notably, major Tesla investor-turned-critic Ross Gerber told him that “as long as you follow a high level of ethics, you’ll be fine,” adding he’d buy in.
But, letting his community “share in the growth” also means letting them share in the losses if the businesses fail. 2022, for example, was a painful year for IPOs on a broader scale. Proceeds were down 93%, as uncertainty from mounting recession fears and market volatility took its toll on investors.
There are also businesses that were stellar until they went public. Casper Sleep, for example, saw its $1.1 billion private fundraising valuation fall to less than half that at $470 million after it went public.
Moreover, there are also still operational issues that need to be resolved, particularly the quality of food at MrBeast Burger. The burger chain runs on a ghost kitchen platform where it relies on partnerships with other businesses to cook their food, meaning the quality may not be consistent across its locations. The chain has received mixed reviews and two stars on Yelp.
All in all, an IPO could just be his biggest challenge yet. And because it’s MrBeast, he might not be able to resist.
Information for this story was found via Twitter, Fortune, Axios, and the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Views expressed within are solely that of the author. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.