Blue Apron rival HelloFresh has announced its plans for an IPO that could leave the Rocket Internet-launched firm with a $1.8 billion valuation, The New York Times reported Tuesday (Oct. 10).
Despite being Germany-based, HelloFresh’s largest market is in the U.S. The company has been spending heavily on marketing of late — think all those TV and radio spots you’ve probably heard lately — and offering discount offers to attract new users.
HelloFresh follows Blue Apron to the public markets. The latter firm had its initial public offering (IPO) in June, but has since seen its initial valuation cut in half by declining customer numbers and the threat of competition from Amazon.
Rocket Internet owns a 53 percent stake in HelloFresh and has had some recent success in taking food delivery startups public, according to The New York Times. Rocket-backed Delivery Hero went public in June and has seen its shares rise by 25 percent since listing. Rocket pledged in 2015 to list two companies in the following 18 months.
HelloFresh will sell new shares for 300 million euros, giving investors a 20 percent stake in the company, according to a person close to the deal, The New York Times reported. That comes out to a 1.5 billion euro valuation, short the 2 billion euro valuation put on the company last December when it raised funds from asset manager Baillie Gifford and Qatar’s sovereign wealth fund.
HelloFresh, has increased its user base to 1.3 million in the second quarter and says funds raised in an IPO would go toward the development of more personalized services — and toward more choices going on the menu.
“The public listing marks the next logical step to further expand our business, to secure our position as the leading global player and to pursue our long-term growth strategy,” said Dominik Richter, co-founder and CEO, in a statement.
Sources have noted that flotation could come as early as autumn of this year.