How long can one entrepreneur carry a packaged-food company before turning to outside investment? Hamdi Ulukaya, the founder of Greek-yogurt maker Chobani, is about to answer that question.
Ulukaya began Chobani with an SBA-backed 504 loan that allowed him to buy a dilapidated factory in upstate New York, but the company has never raised equity. Chobani was considering an initial public offering, but is now said to be considering an institutional investment for 20 percent of the company, according to a Reuters report. Reuters says that Chobani is valued at about $2.5 billion. Chobani has annual revenue of more than $1 billion. Chobani did not immediately return a call for comment.
Few packaged-food companies get to even $30 million or $40 million in revenue without institutional investment, said Happy Family founder Shazi Visram, in an interview late last year. Visram's company reached more than $60 million in revenue before she sold it to Danone. Up to that point, Visram had funded Happy Family with angel investments from approximately 200 individuals. Chobani is perhaps the largest fully independent company in its industry.
Chobani has recently had some missteps, including a September recall of yogurt that appeared to be moldy, and customers complained that it made them sick. In December, Whole Foods said it would no longer sell Chobani in its stores.
Despite its remarkable growth--Chobani was founded only eight years ago--the company is now facing competition from more established brands, in the form of Danone's Oikos yogurt and General Mills's Yoplait. Greek yogurt, which was hardly known in the U.S. before Chobani began making it, is now about a $7.5 billion industry.