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 that’s 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 was priced at $12 for its public offering and right now, in the beginning of December, it’s 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 it could even be as close as 2017.
Despite its fast-growing business with solid financial backing, Blue Apron has been a victim to some recent (and unfortunate) news.
In October, BuzzFeed published an article that uncovered some unfavorable working conditions in one of Blue Apron’s warehouse facilities.
Its Richmond, California warehouse has been dealing with multiple health and safety violations.
There’s been a reported forklift accident in addition to other reports of unsafe conditions that have left employees at risk for fractured bones, chemical burns, and unbearable warehouse conditions — like working in 40-degree temperatures for 10+ hours.
On top of that, there have been multiple police reports submitted in the past three years that involve employees being punched, choked, groped, pushed, pulled, and bitten by other employees.
The company took off quickly, and that could be one of the factors in its influx of workplace violations in the Richmond facility.
As more people subscribed to the meal kits, that meant an increase in warehouse employees — the company needed to hire more employees, and it needed to hire them quickly to keep up with orders.
The Richmond facility grew from fewer than 50 employees in 2014 to its current 1,000 employees.
Blue Apron’s popularity grew overnight and continues to grow. In May 2016, analysts estimated that Blue Apron was delivering 8 million meals a month — valued at almost $500 million.
While every business hopes for this kind of success, especially in the beginning, it’s very important to have an efficient business plan that’ll support this kind of fast growth and success.
Blue Apron has responded to the article and has said that it’s “learned from” those challenges and has addressed its health violations.
It’s also hired a safety manager for the warehouse, stopped working with several temporary staffing agencies that weren’t doing adequate background checks on potential employees, and installed security cameras.
Not to mention that in 2015, the company 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.
While the company is keeping any financial and IPO details at its disclosure, a future Blue Apron IPO will be something you’ll want to keep a lookout for.
Until next time,