Blue Apron is seeking an IPO that could raise more than $500 million for the meal kit delivery service that, despite impressive growth, has yet to turn a profit. The move comes just days after Amazon’s $13.7 billion purchase of Whole Foods Market radically reshaped both the supermarket and food delivery landscapes.
In its prospectus for the IPO, Blue Apron said it planned to price its shares between $15 and $17, which translates to a valuation for the company of up to $3.2 billion, according to the New York Times. In 2016, Blue Apron earned $795.4 million in revenue, more than doubling the previous year’s total. The company has continued to lose money — $54.9 million last year — due to major expenditures on marketing and growth capabilities.
Blue Apron already faces fierce competition from other meal kit services such as HelloFreshand Chefs Plate. With Amazon gaining access to the 400-plus Whole Foods store footprint to work in conjunction with its leading-edge logistics, the race to provide fresh food to consumers — and to turn a profit while doing so — will be even tougher for Blue Apron.
“It’s going to take some time to figure out the impact of the acquisition on food delivery, and there are a lot more available ways to raise money when you’re public than when you’re private,” said Kathleen Smith, a manager of IPO-focused exchange-traded funds at Renaissance Capital in an interview with Reuters.
The Blue Apron IPO is being led by Goldman Sachs, Morgan Stanley, Citigroup and Barclays.