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Blue Apron’s IPO has no pop but plenty of questions

The meal-kit company raised $300 million in its public offering.

Meal Delivery Service Blue Apron To Go Public On NYSE Scott Eisen / Getty
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Blue Apron started trading on the New York Stock Exchange today, opening at about $10 a share after cutting its IPO price to the same number amid questions about whether it can grow profitably as well as the potential of future competition from an Amazon-owned Whole Foods.

The five-year-old meal-kit company, based in New York City, raised $300 million in the offering that gave it a market cap around the same $2 billion number it was valued at in a private fundraising round several years ago. The stock was trading at around $10.65 at noon eastern on Thursday.

Blue Apron’s revenue grew 10x between 2014 and 2016 to nearly $800 million last year, proving that Americans had strong interest in trying out a new way to grocery shop and cook. Blue Apron ships subscribers recipes and pre-portioned ingredients to make three home-cooked meals a week.

But rising marketing costs and steep losses have some investors questioning the long-term feasibility of the Blue Apron model. There’s also a concern that Amazon and Whole Foods could get more aggressive in the market following approval of the $14 billion acquisition.

In an interview with CNBC on Thursday, co-founder and CEO Matt Salzberg dismissed concerns over the current stock price as well as customer churn.

Instead, he said his company is working hard on developing new products to make more money from existing customers as well as new offerings that might attract customers who haven’t found Blue Apron to be a fit just yet. That may include ingredients for meals other than dinner, as well as a different “cadence” of deliveries, in his words.

Salzberg is one of many top industry entrepreneurs and CEOs who will appear onstage at Code Commerce on September 13 and 14 in New York City. By then, we’ll have a lot more to discuss.

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