6 Important Numbers Potential Blue Apron Investors Should Know Ahead Of The IPO

Meal-delivery service Blue Apron has announced its IPO and is expected to raise $586.5 million, according to its S-1 filing with the SEC Monday.

The IPO is estimated to be priced in the $15–$17 range and will value the company close to $3 billion.

Founded in 2012, Blue Apron has since delivered over 159 million meals to home cooks nationwide.

The company continues to post loses due to heavy marketing, after spending $144.1 million or 18 percent of revenue in 2016, although revenues and subscribers numbers continue to grow.

In the first quarter of this year, subscribers grew 54 percent year over year, topping out at 1 million. Sales came in at $796 million in 2016.

“Our vision for the future is ambitious: to build a better food system. We are transforming the way that food is produced, distributed, and consumed. We believe a better food system will benefit not only consumers and stockholders, but also the planet, and we manage our business for the benefit of all three,” said Blue Apron in its S-1 filing.

6 Facts Investors Need To Know About Blue Apron

• Blue Apron averaged 4.1 orders per customer in Q1 2017.
• Average Order Value: $57.23 in Q1.
• 4.3 million orders delivered in Q1.
• Blue Apron nearly tripled its marketing budget in 2016; the company spend 61 million in advertising in Q1.
• 36 percent of customers are in the 25–34 age range.
• U.S. grocery market sales were $781.5 billion in 2016.

Changing Landscape In Grocers, Food Services

After Amazon.com, Inc. AMZN's blockbuster acquisition of Whole Foods Market, Inc. WFM, the grocery industry has been the talk of the business world. While Amazon will likely leverage its e-commerce expertise throughout its role in disrupting the brick-and-mortar grocery experience, the online market may be starting to heat up. While online grocery sales made up only 1.2 percent of the total market, it is expected to grow at a 8.5 percent CAGR from 2017–2020 versus 1.3 percent expected CAGR in grocery as a whole.

The company elaborated on the gap in the market and its potential to deliver:

"We believe an opportunity exists to increase online grocery penetration to the level of penetration that exists in many other retail markets. Conventional grocery stores currently face many of the same challenges online as offline. They have high inventory counts and compete in the sale of commodity products, and confront considerable waste. In addition, conventional grocery stores generally have relatively low gross margin structures and are highly capital-intensive given their large retail footprints, making it difficult for them to invest in technology and innovation."

Furthermore, Blue Apron management is confident it can to capture further market share in the $1.3 billion grocery and restaurant market. The younger generation's preference for experiences over goods bodes well for Blue Apron, helping consumers save time through pre-prepped meals and creating an cost-efficient experience.

“As a relatively young brand, we believe we have an opportunity to grow awareness and to attract new customers to our core product, and relatively modest increases in penetration represent large revenue growth opportunities for us,” said Blue Apron on Monday.

Regarding its consumer awareness, Blue Apron can count Michael Phelps as one of its supporters; the Olympian is a notable celebrity endorser for the meal-kit service.

Blue Apron will trade on the New York Stock Exchange under the ticker APRN.

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