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Meal-kit maker Blue Apron goes public

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NEW YORK: Apron Holdings Inc, the biggest US meal kit provider, raised $300 million as it went public, a third less than it had hoped, as Amazon.com’s industry-changing deal to buy Whole Foods Market Inc (WFM.O) weighed on the sector. New York-based Blue Apron said late on Wednesday its initial public offering of 30 million shares of class A common stock was priced at $10 per share, at the low end of the $10 to $11 per share range issued earlier in the day.


It lowered the estimate from a range of $15 to $17 after potential investors expressed concerns about the $13.7 billion Amazon deal as well as Blue Apron’s marketing costs and lack of profitability, people familiar with the matter said.


They requested anonymity because the pricing negotiations were confidential. Blue Apron is the first US meal-kit company to go public.


Smaller peers and their venture capital investors were hoping it would pave the way for them to also go public or be acquired at rich valuations.


The IPO values Blue Apron at $1.89 billion, below the $3.2 billion implied by its previous estimate and the $2.2 billion by its last private fundraising round two years ago. Amazon already has a small meal-kit business, delivering ingredients and recipes to customers in a handful of US cities.


The Whole Foods deal announced in mid-June would hand the e-commerce company a ready-made distribution system for food delivery in the form of brick-and-mortar grocery stores.


“Amazon’s deal for Whole Foods earlier this month added to concerns, but Blue Apron’s high marketing costs were a negative factor. — Reuters


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