Do-it-yourself meal delivery service Blue Apron is looking to raise almost $450m in its upcoming initial public offering, it announced on Monday.
The company is aiming for an initial price of between $15 and $17 per share. Assuming it achieves at least the mid-point of that price range, the offering would generate net proceeds of at least $448.6m.
Blue Apron’s core business is built around sending subscribers a box of ingredients and recipes to make several meals each week, allowing customers to cook for themselves without having to find recipes or do grocery shopping. It has also launched a wine-delivery business and an online shop for cooking equipment.
Net revenues in 2016 were $795.4m, up more than 100 per cent over the year. However, revenue growth slowed in the first three months of this year, with revenues of $244.8m representing year on year growth of 42 per cent.
The company is also yet to make a profit, with net losses increasing from $47m to $54.9m last year.
In its IPO prospectus, the company said it “may incur significant losses for the foreseeable future” due to the expense of technology, infrastructure and marketing investments.
It also acknowledged that it expects competition in the wider food sales and particularly the food delivery sector “to continue to increase”.
Still, the company argues it has a “broad” market opportunity, as it looks to take market share from restaurants and takeaway providers as well as grocery stores.
The proceeds of the flotation will be used to repay approximately $125m of existing debt and fund future operations.
Co-founder and chief executive Matthew Salzberg* will hold around 29.7 per cent of total voting rights after the offering. The company highlighted the fact that – unlike in other high-profile recent tech IPOs such as Snapchat – Blue Apron’s outside shareholders “will have the ability to control the outcome of matters …including the election of our directors and the approval of any change in control transaction”.
*This post has been amended to correct the spelling of Mr Salzberg’s surname.