Blue Apron Cooking Up IPO to Fuel Expansion

The meal-kit delivery service's financials may give some investors food for thought amid rising losses and signs of stalled growth.
Matthew HellerJune 2, 2017
Blue Apron Cooking Up IPO to Fuel Expansion

Blue Apron is planning to go public with its recipe for helping home cooks avoid having to go to the grocery store.

The pioneering meal-kit delivery service said Thursday in a regulatory filing that it will sell shares in an initial public offering, with a preliminary fund-raising target of $100 million.

According to the filing, Blue Apron’s mission is “to make incredible home cooking accessible to everyone” and its business is “poised to capture share from the grocery and restaurant markets and to benefit from shifts in consumer preferences, including a growing interest in cooking, prioritization of experiences over goods, and increasing interest by consumers in where their food comes from.”

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But the five-year-old startup’s financials may give some investors food for thought amid rising losses and marketing costs, signs of stalled growth and increasing competition.

“Blue Apron has proven popular — but it has not cracked the code when it comes to charging a high enough price to cover its costs,” Forbes said, noting that its sales soared 10-fold between 2014 and 2016 to $795.4 million while its net loss increased to $54.9 million in 2016 from $47 million the year before.

The company itself warned in the SEC filing that “we may not be able to achieve or maintain profitability, and we may incur significant losses for the foreseeable future.”

As The New York Times reports, Blue Apron, which was founded in 2012, would “become one of the most prominent consumer start-ups in recent years to pursue a stock listing.” It has raised nearly $200 million in financing, with its most recent cash infusion coming in 2015.

From inception through the end of March, the company claims to have delivered more than 159 million meals to households across the United States.

But it burned through $20 million in cash in the first three months of 2017, leaving it with just over $61 million, and its average order value fell to $57.23 from $58.78 the previous quarter. Marketing costs rose to $61 million from $25.4 million in the first quarter last year.