Critical Thinking Case
Blue Apron IPO Leaves a Bad Taste
Blue Apron was once one of the top meal-kit delivery services doing business in the United States. Started by three cofounders—Matt Salzberg, Matt Wadiak, and Ilia Pappas—Blue Apron provides preportioned ingredients (and recipes) for a meal, delivered to consumers’ front doors.
Today, the U.S. meal-kit delivery industry is a nearly $20 billion business that is expected to reach over $50 billion by 2035 as more and more consumers struggle to find time to go grocery shopping, make meals, and spend time with family and friends in their hectic daily lives.
As word spread among foodies about the quality and innovative meals put together by Blue Apron, the company’s popularity took off, supported by millions in start-up funding. Costs to scale the business have not been cheap—estimates suggest that Blue Apron’s marketing costs have been high.
Despite the challenges, by early 2017 the company was selling more than 8 million meal kits a month and decided to go public in an effort to raise more money and scale its operations, including a new fulfillment facility in New Jersey. According to IPO paperwork filed with the SEC, the company had net revenues of $84 million in 2014, which increased to $795 million in 2016. However, those ambitious numbers were not without warnings: company losses increased in the same time period from $33 million to $55 million.
Even with those larges losses on its balance sheet, Blue Apron decided to go ahead with the IPO and hired Goldman Sachs and Morgan Stanley, two top stock underwriters, to figure out the right price for the initial offering. While Blue Apron and its underwriters were finalizing stock prices, Amazon announced plans to acquire Whole Foods—a move that could negatively affect Blue Apron’s business going forward.
Even after Amazon’s announcement, Blue Apron and its financial advisors priced the initial offering at $15 to $17 a share and met with investors across the country to inform them about the IPO, which would value the company on paper at more than $3 billion. As part of the IPO strategy, Blue Apron executives needed to communicate a strong financial picture while providing potential investors with an honest assessment of investor demand, especially for institutional investors, who typically are repeat buyers when it comes to IPOs.
According to sources close to the IPO experience, Blue Apron’s bankers told investors late in the IPO pricing process that they were “closing their order books early,” which meant there was a heightened demand for the stock—a signal that the stock would be priced in the original $15–$17 range.
A day later, however, Blue Apron amended its prospectus with a price range between $10 and $11 a share, which shocked potential investors—a move greeted with criticism that Blue Apron’s messaging now lacked credibility in the eyes of the investment community if the company priced the IPO $5 lower per share than originally estimated. With that sudden change in the IPO offering, investors walked away, and the $10 initial offering for Blue Apron stock actually declined on its first day of trading. The stock declined to a low of $4.70 in August of 2023, prompting the company to consider its options.
With continued consolidation in the meal-kit delivery sector inevitable, Blue Apron was at a crossroads when it comes to generating revenue and stabilizing costs while trying to sign up more subscribers. Market competitor Plated was acquired by the Albertson's grocery chain in 2017, and Amazon trademarked the phrase, "We do the prep. You be the chef," as it rolled out prepared food kits in that same year through its AmazonFresh delivery service. The strong competition in the industry, high costs related to gaining customers, and an overall weak competitive advantage prompted Blue Apron to be acquired by The Wonder Group at the end of 2023. Since the acquisition, the service has been rebranded to offer more meal options, additional features such as family-friendly meals and one-pan meals, and enhanced customization options.
- What issues should executives of a company such as Blue Apron consider before deciding to go public? In your opinion, was the company ready for an IPO? Why or why not?
- How else could Blue Apron have raised funds to continue to grow? Compare the risks of raising private funding to going public.
- Research the history of the company to learn about the factors that led to Blue Apron's acquisition. Prepare a brief summary, including how the acquisition by the Wonder Group could help Blue Apron survive.
Sources: Wolf Richter, “Blue Apron’s Cash Burn Is a Threat Just 3 Months after Its IPO,” Business Insider, https://www.businessinsider.com, October 19, 2017; Graham Rapier, “Blue Apron CEO: Amazon and Whole Foods Aren’t the Competition,” Business Insider, https://markets.businessinsider.com, September 13, 2017; Matthew Lynley, “Where Does Blue Apron Go after Amazon Wraps Up Its Whole Foods Deal?” Tech Crunch, https://techcrunch.com, August 27, 2017; Leslie Picker, “Inside Blue Apron’s IPO: Communication Lapse Chased Away Investors,” CNBC, https://www.cnbc.com, August 23, 2017; Phil Lempert, “Understanding Blue Apron’s IPO and the Future of Meal Kits,” Forbes, https://www.forbes.com, June 2, 2017; "Meal Kit Delivery Services Market Summary," https://www.grandviewresearch.com, accessed February 18, 2026; "Blue Apron Holdings Inc (APRN)," https://www.investing.com, accessed February 18, 2026; Allee Manning, "Amazon Is Launching a Meal Kit Delivery Service," Self, https://www.self.com, July 18, 2017; Brooke Bajgrowicz, "Everything You Need To Know About Blue Apron’s Rebrand," Forbes, https://www.forbes.com, September 23, 2025.