clock menu more-arrow no yes

Fidelity in Talks to Invest in Blue Apron at $2 Billion Valuation

The deal would make Blue Apron one of the most valuable private companies in New York City.

Lauren Goode

Talk about cheddar.

Fidelity, the mutual fund giant, is in talks to buy a stake in meal-kit delivery startup Blue Apron at a valuation of about $2 billion, according to a person familiar with the talks. Blue Apron is looking to raise more than $100 million in this round of financing, according to the Wall Street Journal.

Spokespeople for Blue Apron and Fidelity did not immediately respond to requests for comment.

The discussions come a year after Blue Apron raised a $55 million round of investment that valued the company at $500 million, and as investors jostle to place big bets on a host of food delivery startups. Unlike delivery startups Munchery and DoorDash that deliver cooked meals, Blue Apron deliveries require some work, which attracts aspiring home cooks, but also could limit the chances of broad, mass appeal.

Each week, Blue Apron customers receive a box that contains the exact proportion of ingredients needed to prepare three meals, along with the associated recipes. Investors have been attracted to the company’s model because it requires customers to sign up for subscriptions, making it easier for the company to make projections on how much food it needs to buy from suppliers, for example. As of June, the startup was approaching a $100 million revenue annual run rate, Re/code previously reported, and the fact that its valuation may jump 4x suggests the company’s top line may be well above the $100 million milestone by now.

The business is not cheap to run, however. Blue Apron houses all of the ingredients in two giant warehouses and must pay to ship the boxes, which must arrive quickly to guarantee freshness of the food within. It is not clear if the company is profitable.

Such a deal, on paper, would make Blue Apron one of the most valuable private companies in New York City. Blue Apron is run by co-founder and CEO Matt Salzberg, who previously worked at the venture capital firm Bessemer Venture Partners, which has invested in Blue Apron. Other investors include First Round Capital, the Stripes Group and Box Group.

Fidelity has been one of the most active public market investors plowing money into private companies in recent years. Fidelity has bought stakes in Uber, Pinterest and, most recently, Zenefits.

This article originally appeared on Recode.net.

Sign up for the newsletter Sign up for The Weeds

Get our essential policy newsletter delivered Fridays.