Meal kit company Blue Apron likes to say that it provides people with "a better way to cook." But will it provide investors hungry for good food companies a better way to trade? The public market could soon find out.
On Thursday afternoon, Blue Apron filed with the Securities and Exchange Commission its form S-1, indicating that it intends to go public. A share price was not listed; the meal kit company said only that it has applied to have its common stock listed on the New York Stock Exchange under the ticker "APRN."
Private market valuations peg Blue Apron's worth at $2 billion.
The IPO filing comes amid a challenging time for food companies: traditional restaurants are struggling to maintain traffic and sales, and food delivery companies Sprig and Maple both announced in May that they were ceasing operations. Their closures came on the heels of Munchery's March announcement that it was seeking to recapitalize and raise as much as $15 million to revitalize its business.
Blue Apron, which was founded in 2012, boasts a different premise from these struggling and shuttering on-demand food start-ups: rather than deliver hot prepared food to a diner's door, Blue Apron develops recipes, sources the ingredients for said recipes, and delivers that box of ingredients to your home. There are two basic ordering options: the two-person plan, which delivers three recipes that can serve two people, costs $59.94 per week, while the family plan, which can include two- or four recipes for four people, costs $69.92 for two recipes or $139.84 for four. Based on 2016 data, the company said, 78% of its customers chose the two-person plan.
In 2015, Blue Apron also started delivering wine as a part of its service. "If half of our customers subscribed to wine, we'd be the largest wine e-commerce player in the U.S.," co-founder Matt Salzberg told Forbes at the time.
The company is ambitious when it looks at its market opportunity: in its prospectus, it says it can capture share from the $781.5 billion grocery market (of which just $9 billion is online) and the $543.1 billion restaurant market (of which $12 billion is online).
It's a lofty goal. According to Blue Apron's own disclosures, the company reaped $795.4 million in 2016 revenue, up from $340.8 million in 2015 and $77.8 million in 2014. On the profitability front, Blue Apron has struggled: it posted a $54.9 million net loss in 2016, a $47 million net loss in 2015 and a $30.8 million net loss in 2014. While it did go into the black during the first two quarters of 2016, it swung to a $52.2 million net loss in the first quarter of this year.
"We incur significant expenses in developing our technology, building out our fulfillment centers, obtaining and storing ingredients and other products, and marketing the products we offer," the company explained. It went on to give investors a bit of a warning.
"In addition, many of our expenses, including the costs associated with our existing and future fulfillment centers, are fixed," it said. "Accordingly, we may not be able to achieve or maintain profitability, and we may incur significant losses for the foreseeable future."
