Huel IPO: what to know and how to buy shares

When could the Huel IPO take place?

Huel originally planned to launch its Initial Public Offering (IPO) a couple of years ago, after hiring Goldman Sachs and JP Morgan as advisors. However, while an IPO arguably remains the preferred path, it has been delayed due to the weak launch market.

In late 2023, CEO James McMaster advised ‘We did consider the IPO market before the markets died basically at the beginning of 2022; who knows where that ends up. Going back two years ago, everyone was saying how great the markets were and maybe in time they will come back…If not, we are open-minded to some form of partnership with a larger company.’

For context, the wider IPO market remains under pressure from lower valuations, higher interest rates, and general global instability. And similar innovative food companies like Beyond Meat have struggled to compete. However, the CEO also noted that Huel has ‘got investors, and they invested quite a long time ago, so at some stage there needs to be a realisation of that.’

With rates starting to fall, inflation broadly under control, and a flicker of life in the IPO market, the CEO may soon be reconsidering — especially given corporate growth in the US and Germany since.

How to buy Huel shares if the company lists

If Huel do end up listing in the UK, you can buy their shares from £3 commission with us. That's the rate if you've traded 3+ times in the previous calendar month, otherwise our standard fee is £8.

You'll be able to invest in Huel right away on the day of the listing.

1. Do your research on IPOs
2. Open a share dealing account
3. Search for Huel on our share dealing platform
4. Choose the number of shares or amount of money you wish to invest
5. Place your deal

When dealing shares, you own the stock and become a shareholder in the company. You'll profit if the share price rises above the point at which you bought, or potentially from any dividends paid. You could get back less than you put in.

You can also trade the Huel IPO using leverage through a variety of products with us. This means you could gain or lose money quickly and could end up losing more than your initial deposit. This is higher risk and requires thorough risk management.

Read more about IPOs:

• Upcoming IPOs to watch
• How to trade or invest in IPOs
• Trading IPOs on our platform

What will Huel be valued at and what will the share price be?

Huel was most recently valued at £440 million back in 2023, though has since received backing from Morgan Stanley’s investment management arm — and enjoyed strong organic growth.

In financial results for the fiscal year to 31 July 2023, Huel saw revenue increase by 28% year-over-year to £184.5 million with an EBITDA margin of 5.3% — and it swung to a pre-tax profit of £4.7 million, compared to a £10.6 million loss in fiscal 2022.

Meanwhile, active customers rose by 8% in the year to 988,000, while Huel’s retail presence rose by some 51% to 11,250 worldwide.

Huel is still majority owned by founder Julian Hearn who owns 53% of its shares, though the remaining shareholding is not in the public realm. At IPO, you might expect a higher-than-average share price if Hearn wishes to retain a significant number of his shares.

What is Huel’s business model?

Huel was founded in 2015 as a fitness and health focused start-up, selling ‘human fuel’: complete meal replacements derived from wholly vegan products including oats, rice protein, pea protein, sunflower, flaxseed, coconut oil MCTs and dietary supplements.

Huel’s flagship product is designed to be nutritionally complete, meaning it provides all the essential nutrients your body needs — though the business has since expanded into snacks, drinks and supplements. The products are attractive to those who are following a plant-based diet or who have food allergies, and they also host some clear ESG advantages.

Huel is the market leader in the ready-to-drink meal category in the UK, and now operates its own production factory in Milton Keynes. In late 2023, McMaster noted that ‘It’s a business that’s growing quickly and making profit and healthy margins. We’re plant based and good for the planet, so we’re pretty strong in terms of attractiveness.’

The company generates significant revenue from direct-to-consumer sales of its products, offering a subscription service to loyal customers, but now also sells in thousands of shops worldwide.

Huel has enjoyed success during its international expansion. The company has been selling to online customers in Germany since 2016, and the country is now Huel’s third-largest sales market. The market for smart food in the country has increased by 200% to around €94 million over the last three years — and Huel is now found in major food retailers and drugstores in Germany, as it moves further into bricks and mortar sales.

In the US, Huel currently generates circa $100 million a year in sales — in a market that is notoriously difficult to crack. The company was successful for several reasons; notably it knew there was significant demand as it could gauge popularity among American customers on social media. Further, entering the country initially through its D2C model rather than trying to build relationships with retailers first, gave Huel a significant advantage over rivals.

Perhaps Huel’s most significant competitor is Soylent, another dedicated meal-replacement firm that also enjoys similar brand awareness. However, larger titans including Kellogg's, Herbalife and Unilever are all attempting to muscle into the space, with varying degrees of success.

Why are there Huel ethical concerns?

Huel markets to customers though social media in addition to traditional channels, characterising consumers ‘Hueligans’ on its website. However, it has landed in hot water for its adverts on several occasions — including an Instagram post claiming health benefits and cost savings that was banned by the Advertising Standards Authority (ASA) — and ads by podcaster Steven Bartlett in which he failed to make clear he had a financial interest in the company.

For context, the ASA noted that ‘because we had not seen evidence that the Daily Greens product was cheaper than a portion of greens, we concluded that the claim the product was “substantially cheaper” than an equivalent portion of greens was misleading and could not be substantiated.’

The ASA also condemned the implication that Huel could contribute to healthier skin, reduce tiredness and had gut-friendly probiotics — warning that health claims for food and food supplements have to be authorised by a regulator. Another advert suggested that a month of Huel could cost less than £50 per month but failed to make clear this was based on just one meal replacement per day.

While there are very clear ethical positives with Huel, would-be IPO investors may need to consider potential governance issues given these infractions.

Huel-related investments

As Soylent is also privately held, and no other dedicated meal replacement competitors are currently listed, there are few related investments of interest. Larger companies such as Kellogg’s or Unilever are poor comparators given their developed and diversified operations.

For investors attracted to the ESG benefits of Huel, a popular choice is the US Vegan Climate ETF (VEGN), which seeks to track the Beyond Investing US Vegan Climate Index, which screens US companies for a variety of considerations, primarily animal harm and exploitation, as well as fossil fuels, environmental damage and human rights. However, this ETF is dominated by large cap companies rather than growth stocks.

Huel IPO summed up

• Huel sells ‘human fuel,’ complete meal replacements derived from wholly vegan products, both in shops and directly to consumers
• The company has enjoyed international success including in both Germany and the USA
• Huel was most recently valued at £440 million back in 2023, and saw revenue increase by 28% year-over-year to £184.5 million in its latest financial year
• There are few Huel alternatives for investors to consider at present, so it could be a popular IPO for those seeking to diversify or invest in an ethical company