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Watching Blue Apron over the last 5-10 yrs feels like something from a slow moving traincrash. Perfect example of the risk/ fragility in the market today, and there are plenty more. Blue Apron has never turned a profit!!! The company has burnt a total of $700 million in cash between 2014 and 2022. All good things come to an end—and the same is true for zombie companies, the businesses that lurch from day to day, barely alive. Blue Apron, a meal kit delivery service, is a best case example of these. E-commerce entrepreneur Marc Lore—founder of Jet.com and Diapers.com, who now runs food-delivery startup Wonder—is buying Blue Apron for $103 million in cash, via a tender offer for the publicly traded company’s shares. His offer is 95% lower than Blue Apron’s 2017 IPO valuation of $1.89 billion. At the offer price of $13 a share, it’s a big improvement on the roughly $6 a share level where Blue Apron has been trading until today. Investors had pretty much given up on this company. After experiencing rapid growth in its early years, Blue Apron peaked at revenue of $881 million in 2017, the year it went public, and immediately began declining. Revenue has stalled at around $460 million for the past few years. Blue Apron has never turned a profit. It has burned a total of $700 million in cash between 2014 and 2022. #startups #scaleups #ipo #revenue #pricing #uniteconomics #righttoplay #sustainable #profitable #growth #overinvestment #overfunding #overhyped #fragility #hownotto #bankersandbuilders
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Blue Apron sells itself for a mere$103m Blue Apron, the meal-kit delivery company, accepted to sell itself to Wonder Group for a mere $103m A failure for a company that raised $0.4bn and that once reached $1.9bn market cap Why Blue Apron failed? - First, the segment is notorious for its complexity (fresh food logistics requirements, difficulty to generate attractive gross margin to absorb fixed costs, high-scale requirement to drive mental availability at scale...) - Specifically, Blue Apron lacked vertical logistics integration & experienced repeated supply chain issues - It had fewer consumer options/ price-points vs. its competition (HelloFresh) which led to under-optimized CLTV - It was sub-scale ($0.5bn net revenue vs. $7.6bn for HelloFresh) - It displayed one of the lowest gross margin on the segment (25%-35% vs. 55%-65% for HelloFresh) The Wonder Group began making waves in May 2021, operating a fleet of faceless vans in Westfield, New Jersey. Wonder’s goal was to deliver fine dining options to residents of the New York City suburb. Vans were retrofitted as kitchens to cook and deliver the food to the customer The company partnered with restaurants to recreate their menu in an effort to save affluent suburbanites from having to go into the city to eat their favorite fine dining options By 2023, Wonder had abandoned the food truck concept, instead opting for a food hall restaurant concept that offers several menus within the same store. Similar to the food truck concept, Wonder has licensing deals with other well-known restaurants to prepare their foods in Wonder locations Last year, Wonder raised $350 million at a $3.5 billion valuation, according to the Wall Street Journal. For now, Wonder has indicated that Blue Apron will operate more or less the same “Wonder plans to continue Blue Apron’s current operations serving customers nationwide under the Blue Apron brand, with expected new synergies between consumer-facing apps and delivery logistics,” Blue Apron said Friday. Definitely a deal to watch in the coming quarters Keen to hear your perspective To hear more on our research on M&A in the FMCG industry: https://lnkd.in/eaUgq3KU To get all our FMCG CEO insights, sign-up to our newsletter: https://lnkd.in/eR8vDpvE #fmcg #cpg Nestlé Unilever https://lnkd.in/ddqYDZVk