Smaller portions: Blue Apron slashes proposed IPO deal size by 34%
- Author: Fernando Stephens Jun 30, 2017,
Jun 30, 2017, 0:45
The company priced its IPO at $10 a share, the low end of the expected range of between $10 and $11 per share. Blue Apron's offering price valued the company at around $1.9 billion, well below the $2 billion valuation it earned during a 2015 round of private fundraising.
In a Securities and Exchange Commission filing earlier this month, Blue Apron estimated it would sell 30 million shares at $15 to $17 each.
The deal is led by Goldman Sachs, Morgan Stanley, Citigroup, and Barclays, with help from RBC, SunTrust, Stifel, Canaccord, Needham, Oppenheimer, Raymond James, and William Blair.
Blue Apron CEO Matt Salzberg, during happier times.Flickr/TechCrunchFollowing a disappointing IPO tainted by Amazon's recent acquisition of Whole Foods, the CEO of Blue Apron isn't giving up hope. Reuters says that DeliveryHero's offering is likely to price at the high end of that range, which would value that company near $5 billion. The meal kit company's shares ended unchanged Thursday in their first full day on the stock market.
In the short couple weeks that yuppie meal-in-a-box delivery service Blue Apron spent on its IPO roadshow, basically everything in the world that could go wrong for the company did.
Blue Apron intends to use the net proceeds from this offering to repay indebtedness, with the remainder going toward working capital and general corporate purposes.
While Blue Apron has yet to deliver full-year profits, investors will want to be assured that they are showing a path to profitably. About 1 million customers use the product, according to the prospectus.
That was a jump from Blue Apron's April 2014 valuation of $500 million, alongside a $50 million funding round. Salzberg noted the company had recently begun selling wine and cooking supplies to supplement its core meal-kit business and saw additional "opportunities with different dietary preferences, different price points for customers, different cadences, different cooking occasions".
The company's revenue has exploded in the past few years, growing from $77.8 million in 2014 to $795.4 million in 2016.