The Beauty of Blue Apron

You’ve probably seen Blue Apron’s ads while browsing the Internet or on any of your social media feeds.

I have, and they’ve certainly grabbed my attention a few times…

Essentially, Blue Apron offers an easier way to get your groceries — and not only that, but a new way to experience one of your last meals of the day… dinner.

We’ve all been there. You’re on your way home from work trying to figure out what’s for dinner.

You don’t want to pick up fast food because that’ll carry the guilt of eating something unhealthy. You could go to the grocery store, but you’re already too exhausted.

If you do decide to make something, you want it to be easy to prepare and easy to cook, so you can eat and finally unwind from the day.

And that’s where Blue Apron comes in.

The Beauty of Blue Apron

For a two-person plan, you get three recipes a week for $59.94, or you can choose the family plan where you can get either two or four recipes per week for $69.92 or $139.84, which will feed four people.

Once you sign up, you’re able to pick from a variety of recipes on the website that seem the most appetizing. If you don’t find something you like, you do have the option to skip a week of meals.

Blue Apron offers healthy and sustainable meals that should only take around 30 minutes to prepare and cook.

All ingredients for each recipe are measured out according to the recipe and placed in an insulated box to keep ingredients fresh for delivery.

Blue Apron is a New York-based company that was founded in 2012 by Matt Salzberg, Matt Wadiak, and Ilia Papas.

Their mission is to reduce food waste and support local farmers who use regenerative farming practices that’ll build healthy soil for future generations.

According to the New York Times, Blue Apron ships about 8 million meals to customers nationwide every month — up from 5 million per month in October 2015.

It’s on track for $1 billion in revenue in the next 12 months.

An Imminent IPO

With that being said, it looks like Blue Apron is preparing to go public.

It’s been rumored that the company has been interviewing banks to get an idea of what kind of IPO strategies these banks could offer.

Blue Apron would be the first meal-kit delivery company to go public, and it would also be the first consumer technology company to IPO since Match Group (NASDAQ: MTCH) went public last year (November 2015).

Match Group Chart Dec 2016

Match Group was priced at $12 for its public offering, and in the beginning of December, it was priced at $18.05, a 50% increase in a little over a year of being on the market.

Market research firm Packaged Facts estimates that the U.S. meal-kit delivery services market will grow into a multibillion-dollar market over the next five years. There’s decent potential for market growth for Blue Apron, especially since it’s already leading the market with its services.

An IPO for Blue Apron would increase its valuation, bringing it up to $3 billion.

Recently the company has raised almost $200 million — an addition to the $135 million that was raised during its series D round in June 2015.

A series D round is the fourth stage in a financial investment cycle. Startups use this cycle to gain investments from venture capitalists and other investors.

The series D round usually happens when a company is on the verge of going public but still wants to gain a little more capital before its IPO…

Leading me to one conclusion: a Blue Apron IPO is imminent, and we could even see it go public this year.

Blue Apron had more than $800 million in annual revenue in 2016.

However, there are a few things holding Blue Apron back from making a public offer right now. It’s holding out for stronger performance that’ll support its $3 billion valuation. On top of that, it wants to have a better grasp on its subscribers, so it can work on transforming infrequent subscribers into long-term subscribers.

Looking Ahead

Every business hopes for the kind of “fast success” that Blue Apron has endured, especially for a new company in a new market.

The real key to maintaining this success is to create a business plan that’ll support fast growth.

And that’s exactly what Blue Apron is doing.

In 2015, it hired Brad Dickerson as CFO, who was the former CFO and COO at Under Armour.

Blue Apron’s CEO, Matt Salzberg, had this to say:

Brad brings deep experience in scaling fast-growing iconic brands, and we expect his leadership will be an invaluable asset to the company as we continue to grow at a rapid pace.

The company is not rushing its market debut. It wants to make sure it is structurally ready to handle growth and will be able to maintain its valuation.

While the company is keeping any financial and IPO details at its disclosure, a possible 2017 Blue Apron public offering will be something you’ll want to keep a lookout for.

Until next time,

Jennifer Clark
Pro Trader Today