Blue Apron on Thursday filed to go public, but that doesn’t mean the meal-kit pioneer has won the start-up game. From 2014 to 2016, the company grew revenue from less than $80 million to almost $800 million. But it also saw its losses grow, from $31 million to $55 million.
That’s because new growth has been fueled by new customers, and those customers are easier to acquire in a nascent market. Blue Apron reported spending about $94 in marketing per new customer in 2014. But as the market became saturated, that number has grown to $460 per new customer.
As Blue Apron continues its efforts in the public sphere, things are going to have to change. The company plans to add more products and options to grow revenue from existing customers. People will have more control over how many meals they want to make each week and more flexibility in wine selection and delivery. Currently, this option is only available on a monthly basis.
This has the potential to keep customers using the service even when they have less time or money to invest in cooking because they’ll have the option to keep using Blue Apron on a less-frequent basis rather than canceling their subscription altogether.
PYMNTS and others reported in April that talks were underway about Blue Apron filing for an IPO. Reuters said the company had hired bankers from Goldman Sachs, Morgan Stanley and Citigroup to look into the possibility. TechCrunch, on the other hand, thought the rumors were just a litmus test to see whether potential buyers might be attracted.
Sources said at the time that Blue Apron was not looking for a buyer because it needed to have a healthy margin before it could attract potential suitors. But that didn’t rule out an IPO. Some speculated that investors may be looking for a way out of the unprofitable company and pushing for an IPO.
Despite being unprofitable so far, Blue Apron is still the leader in the emerging grocery category of meal kits, and it’s not relenting on its ambitious vision for the future, outlined in its IPO filing: “To build a better food system.”
“We are transforming the way that food is produced, distributed, and consumed,” says the company. “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.”