Vacasa and Dutch Bros Go Public

Vacasa displays short-term rentals

Oregon companies join an upswell of businesses launching IPOs, adapting to an evolved economy. 

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If early indicators are to be believed, the U.S. economy has proven resilient in the face of COVID-19’s delta variant. The Leading Economic Index  reported 0.9% growth in July. Last week, S&P 500 recorded its fifth record closing in a row, its longest streak since 2017. Oregon added 20,000 jobs last month. According to the Office of Economic Analysis, the state has now recouped 70% of its initial job losses.

Despite the uncertainty in some areas of the economy, other segments — particularly the restaurant and hospitality industry — are returning. After announcing a round of layoffs in 2020, Portland-based short-term rental company Vacasa announced at the end of July that it will go public in a $4.5 billion deal. Though the coffee sector was among the hardest hit during the pandemic, Grants Pass-based coffee chain Dutch Bros also announced an IPO release in June.

The companies’ announcements follow one from green energy battery manufacturer Energy Storage Systems (ESS), which went public in an SPAC acquisition in May. 

This summer’s round of public offerings could lead to further economic development for the state as it forges ahead to a greener, more remote way of life. The evidence suggests the economy is reshaping as well as rebounding. Companies poised to thrive in pandemic conditions have room to act quickly, and gain even larger shares of the evolving market that shows little sign of going back to normal. 

On its face, going public now could look like a risky proposition. The stock market has experienced considerable volatility in the last few months. The rapid spread of COVID-19’s delta variant, an economic slowdown in China, and the seizure of Afghanistan by the Taliban could spell further volatility for the foreseeable future. 

The rise of remote work and new prevalence of online delivery services has largely meant that while some sectors like oil and retail have seen a decline, the growth of other industries have been more than enough to offset them. Despite volatility, certain segments of the economy are showing consistent growth. 

It isn’t just Oregon companies following the trend: doughnut vendor Krispy Kreme and salad chain Sweetgreen filed recent IPOs, and Chinese restaurant chain P.F. Chang’s is in the initial stages of going public, according to Bloomberg News.

Given historically low interest rates and a rebounding, reshaping economy, it’s no mystery why certain companies across the country have chosen now to go public. 

Short-term rental companies like Vacasa have fared particularly well during the pandemic. The availability of vaccines this spring and summer has resulted in an uptick in travel, according to industry journal Hotel Management’s 2021 Global Hotel Investor Sentiment Survey — though recovery in the sector varied significantly by region. An internal study commissioned by Vacasa found that 52% of travelers would rather stay in a vacation rental than a hotel since the onset of the pandemic.

A spokesperson for Vacasa says the company has no plans to leave its Portland Pearl District headquarters, and that the reinvested capital from the IPO could result in a local hiring surge. 

Despite the pandemic wiping out 24% of the coffee market according to industry review site World Coffee Portal, Dutch Bros — a company already specializing to-go orders and online coffee sales, grew. The company opened 72 new locations and added 3,000 employees in 2020, according to restaurant industry podcast A Deeper Dive. With so many competitors rolled up, the coffee house chain is positioned to capture a greater share of the coffee business. 

A spokesperson for Dutch Bros. said the company could not provide comment.

With the delta variant surging due to low vaccination rates, it seems certain the COVID-19 economy will be with us for a while. Economists warn some industries may never go back to the way they used to be. 

Federal reserve chairman Jerome Powell said we are “not simply going back to the economy that we had before the pandemic,” at a virtual town hall for teachers and students. 

For companies currently filing IPOs, that’s all part of the plan. 

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