'Sweetgreen is Not a Tech Company': The Company's CEO on How He's Adapting to the Pandemic

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

'Sweetgreen is Not a Tech Company': The Company's CEO on How He's Adapting to the Pandemic

Jonathan Neman, the 35-year-old co-founder and CEO of Sweetgreen, wants to make one thing clear.

"Sweetgreen is not a tech company," he says. "If you want to make that the headline, you can."

With a lofty $1.6 billion valuation, a sleek headquarters in Culver City down the street from Apple and Amazon, and talk with Kara Swisher about becoming a "food platform," one could be forgiven for thinking Neman has aspirations that go way beyond serving salads, bowls and now plates in 108 stores. These days everyone wants to be a tech company, even if they are just renting office space or selling stationary bikes. Neman certainly has lofty goals – wanting to expand to what he says is "well over" 1,000 locations. But he says he is trying to grow Sweetgreen in the mold of Starbucks, not Snapchat.


"We see ourselves as building the Starbucks of real food," Neman said. "We're actually not even valued like a tech company. If you look at the valuation it's much more like a high-growth food company. We leverage technology to build a better experience and make smarter decisions. And I think it is an accelerant to how we can grow and scale and build our model. However, at the core of what we do, we are a consumer brand."

Sweetgreen's origin story is decidedly techie. Neman hatched the concept with classmates Nicholas Jammet and Nathaniel Ru in a dorm room during their senior year at Georgetown University. Three months after graduation, they opened their first location in Washington D.C. in 2007. In 2016, they relocated to Los Angeles after opening their 39th location.

Last year, Sweetgreen reported $300 million in revenue and $3 million per store, well above Chipotle or Starbucks, which generated $2.2 and $945,270 per location, respectively.

The company would not disclose its numbers for this year but in an April blog post Neman and his co-founders described revenue being "dramatically affected" by the coronavirus. That month, Sweetgreen laid off about 10% of workers at its headquarters and furloughed nearly 2,000 store employees after deciding to return a $10 million PPP loan.

"As soon as we found out that they had run out of money, we decided to give it back, which we think was the right thing to do," Neman said.

Now 75% of the furloughed workers have been brought back and Sweetgreen has reopened all but 11 of locations. All dining rooms in California remain closed though some locations with outdoor seating can accommodate diners. Headquarters is officially open, though it is mostly empty as the company is not requiring anyone to come in for the foreseeable future. Despite some permitting delays because of COVID, Sweetgreen is planning to open 20 new locations this year and considerably more next year. And in late April, it introduced its first new major menu category since adding bowls four years ago – nine different plates, ranging from Hot Honey Chicken to Shroomy Asada, designed to increase dinnertime sales. On Wednesday, Sweetgreen will hold its first-ever $5 Greens Day where it will offer select bowls and salads for well under half the normal price.

Sweetgreen introduced its first new major menu category since adding bowls four years ago – nine different plates, ranging from Hot Honey Chicken to Shroomy Asada.

dot.LA spoke to Neman about how the company is adapting to the COVID era, why he ended an exclusive partnership with UberEats, and when Sweetgreen might IPO.

A lot of your business has been centered around offices. How are you adjusting since people aren't coming into offices?

To your point, we have a very high penetration in some urban areas and those are the ones that have been more severely impacted. Our restaurants that are more suburban-based are actually doing really well. Many of them have fully recovered to pre-COVID levels through just delivery and pickup. So really the impacts we're seeing are primarily only from the true demographic shifts rather than from changing consumer behaviors.

Jonathan Neman hatched the concept of with classmates Nicholas Jammet and Nathaniel Ru in a dorm room during their senior year at Georgetown University.

Does COVID change where you anticipate opening stores in the next few years?

Yeah, a little bit. We were already on a path of expanding beyond our current markets. This year, we have already opened in Denver and Miami and we're opening in Austin. And so we already penetrated a lot of the larger cities, and we're on our way to going into other markets that are more suburban. If you look at the makeup of the United States it's much more suburban than urban. So there was a lot more suburban growth coming, but I think this has accelerated a lot of that as our suburban model has done better. But we have not given up on the cities. We're going to continue to open in New York. We are very confident people will come back to work, although it may be different and we'll be well positioned for it.

Now that we're in a recession do you worry that people will see your menus and think of it as an indulgence to spend $14 on a salad?

Our prices are different by market. Definitely very top of mind for us is affordability. We like to balance all stakeholders when we think about price. So you have to think about how we pay our team members and our farmers.

This is why food is really complicated. I could charge less, and then pay my team members less and pay my farmers less and then I'd get heat for that as well. But having said that, I do think that Sweetgreen will do more over time to address different consumers and price sensitivity. Over time we will think about different menu items and formats and ways to make it more affordable. One way is when you think about our plates, $12 for lunch may be expensive but $12 for dinner is actually pretty affordable. Another way we do this is through things like Outpost [a central drop off shelf in buildings where Sweetgreen couriers drop off orders.] You're not paying the delivery service fee that you would for a lot of other places.

You had signed an exclusive deal with Uber Eats last year and then canceled it. What was the decision behind that?

We have a great relationship with Uber but I think we've realized over time that different consumers use different platforms and they're more incremental to each other than they are cannibalistic. Especially in a post-COVID world where delivery will be a bigger piece of the pie, we wanted to get in front of as many consumers as possible. We also are very focused on our native delivery which is which is by far our biggest delivery channel,

I'm curious how you think about delivery. Because for a lot of restaurants they're sacrificing huge margins...

Correct. Not only are they sacrificing huge margins, but they don't have a direct relationship with their consumers. We have a direct relationship where we can tell you when new menu items come out and we can personalize the experience to you.

So why not just have it all be native?

I think there's certain customers where the marketplace becomes a great place of discovery, it becomes, you know, almost like a customer acquisition marketing tool for us a way to amplify our message and reach more people.

Have you ever thought about doing brunch or breakfast?

We definitely have. Sweetgreen is an ethos, which is connecting people to real foods. Eventually we'd like to take that ethos and expand way beyond salad, bowls and plates, whether it be brunch or otherwise. The vision is to go much, much broader.

That's a perfect segue to my last question. What's your current thinking on a possible IPO?

There's no current thinking right now. We're just very focused on expanding the brand, delivering a great product to consumers and strengthening the business. Sure, one day, but not not anytime soon.

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🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🔦 Spotlight

In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

Image Source: Disney

Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

🤝 Venture Deals

LA Companies

  • ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
  • Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
  • Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
  • Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
  • AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
  • Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
  • 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
  • LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
  • Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

LA Venture Funds

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Anduril Seeks $1.5B in VC Funds

Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

Image Source: Anduril

Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

Silicon Beach: Looking Back, Moving Forward

Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

Percent Change In VC Funding By Region

CB Insights

LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

🚀 SpaceX gears up for another stellar year, active raises, and more

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Happy Friday Los Angeles! You made it through the first week of 2024!

🔦 Spotlight

Elon Musk may be a divisive (albeit entertaining) figure, but the continued success of SpaceX is pivotal for the aerospace industry in Los Angeles and more broadly around the world.

Image Source: SpaceX webcast

What happened with SpaceX in 2023?

  • Elon Musk challenged Facebook founder, Mark Zuckerberg to a cage fight.
  • SpaceX launched 96 successful missions with its Falcon series of rockets, a 57% increase over its previous annual record.
  • SpaceX conducted two test flights of the largest and most powerful rocket ever built, Starship.
  • Roughly two-thirds of SpaceX's launches in 2023 were devoted to building out Starlink, the company's satellite-internet megaconstellation.
  • Isaacson’s Elon Musk biography was published in September including everything from Musk’s tumultuous relationship with his father to his work ethic and “demon mode”.

Moving forward what can we expect from SpaceX and its controversial founder? Continued innovation pushing the aerospace industry to new limits? Yes. More drama? Without a doubt.

Here is some of what is to come in 2024:

🤝 Venture Deals

Just Announced

Check back next week!

LA Exits

  • CG Oncology, an Irvine, CA-based developer of immunotherapies for bladder cancer, filed for a $100M IPO. It plans to list on the Nasdaq (CGON) with Morgan Stanley as left lead underwriter, and has raised around $317m in VC funding. - learn more
  • McNally Capital agreed to sell Advanced Micro Instruments, a Costa Mesa, CA-based maker of gas analyzers and sensing technologies, to Enpro (NYSE: NPO). - learn more

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a hard-tech startup that is developing a technology for decarbonizing natural gas, is raising a $1.5M Seed Round. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $250K Angel Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

📅 LA Tech Calendar

Sunday, January 7th

Wednesday, January 10th

  • Startup Cafe: Networking with a Kick - Entrepreneurs, Startups, and Tech Enthusiasts join together to meet and connect with like-minded people, industry professionals and investors, while enjoying a nice cup of coffee in Venice at The KINN. This week’s interactive discussion about AI’s evolution in entertainment will feature Dr. Sam Khoze and Rachel Joy Victor.
  • Venice Tech Happy Hour- Join Startup Coil and FoundrHaus Wednesday evening and enjoy the sunset from the rooftop, grab a bite overlooking Abbot Kinney, and mingle with other tech enthusiasts and entrepreneurs by the bar on the patio.

Have an awesome event coming up? Reach out to be featured on next week’s Newsletter!

📙 What We’re Reading

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