![]() While enterprise subscription businesses often have lower turnover because there’s too much friction to change course, people can change their habits on a whim. And now that Amazon bought Whole Foods, some are wondering if they will introduce something comparable.Ĭonsumers can also be fickle. Plated, HelloFresh and Sun Basket all offer similar business models, just to name a few. In Blue Apron’s case, there is a growing sea of competition with countless meal kit delivery services. Subscription businesses have their challenges. In other words, they are spending more for each dollar earned. Blue Apron nearly tripled their marketing budget to $144.1 million last year, up from $51.4 million the year before. What investors are most concerned about is the growing marketing spend as a proportion of their revenue, suggesting that there’s high customer turnover. Last year the company lost $54.9 million and the number was $47 million for 2015. Blue Apron brought in $795.4 million in sales last year, a substantial gain from $340.8 million the year before.īut, like most venture-backed companies at the time of their IPO, there are also losses. On the one hand, they showed strong revenue for just a five-year-old company. The reaction to Blue Apron’s financials has been mixed. If “APRN” doesn’t go up, it will signify weak demand. ![]() Most companies “pop” on day one, deliberately leaving room for double-digit percentage gains so that new investors can benefit. The market will be watching Blue Apron’s first day of trading closely. New York-based Blue Apron was valued at $2 billion in its last private round in 2015 and its current market cap is just below that. It also suggests that some investors and possibly some employees who joined the venture-backed company at a later stage are underwater. It’s also flat compared to the $10 they priced it at last night, meaning the IPO investors have yet to reap any gains. Meal delivery business Blue Apron opened for trading at $10 per share on Thursday, significantly below the originally proposed range of $15 to $17. ![]()
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