The New York-based startup, which ships boxes of pre-measured ingredients to home cooks, is in talks with Fidelity, the mutual fund giant, to raise money from investors at a valuation of around $2 billion. Run by co-founder and CEO Matt Salzberg, the company is seeking to raise more than $100 million but the deal hasn’t been finalized. In the past, it raised $50 million from investors in April 2014 at a $500 million valuation.
What is Blue Apron?
Each week, Blue Apron customers receive a box that contains the exact proportion of ingredients needed to prepare three meals, along with the associated recipes. Investors have been attracted to the company’s model because it requires customers to sign up for subscriptions, making it easier for the company to make estimates on how much food it needs to buy from suppliers. As of June, the startup was approaching a $100 million revenue annual run rate and the fact that its valuation may jump 4x suggests the company’s top line may be well above the $100 million milestone by now.
What Happens Post Funding?
The deal, if successful, would make Blue Apron one of the most valuable private companies in New York City and also elevate the company into the ranks of the most highly valued private New York startups, a group that includes WeWork Cos., a provider of shared office space, and eyeglass maker Warby Parker. WeWork has been valued at around $5 billion, and Warby Parker was valued at around $1.2 billion in a recent funding round, according to the New York Journal.
A number of meal-kit startups have launched over the last three years. Plated, HelloFresh and Marley Spoon are among the companies competing with Blue Apron for the dining dollars of American consumers.