Blue Apron co-founder and chair departs, throws $3 million back into struggling company
By The MixDex Team Article may include affiliate links
Blue Apron saw a bit stock boost after it announced a plan to raise more capital and remove “super voting” shares Sept. 15, 2021.
The meal kit company, which has yet to turn a profit, is making significant changes at the top.
Co-founder and chair Matthew Salzberg has resigned from the board of directors, as has Barry Salzberg.
Matthew Salzberg has committed to investing $3 million of his own money into the company while it also will eliminate Class B shares that largely gave company founders 10 times the voting power.
Select shareholders have agreed to convert their Class B shares, which had 10 votes each, to Class A shares, which get a single vote each.
Meanwhile, the company is looking to raise nearly $80 million in equity.
Wall Street responded by giving the stock a 45% boost, though as of this writing it’s trading at about $5 a share. It IPO’d in 2017 at $10 a share.
It soared to as high as $160 but plummeted in value since then.
Blue Apron says it had $124 million in revenue for the second quarter of 2021, but recorded a net loss of $18.6 million, which included a no-cash charge of around $4.1 million.
It dropped from 2.152 million orders in the quarter ending June 2020 to around 1.977 million at the end of second quarter 2021. It also lost 21,000 subscribers in that time period, and average orders per customer dipped slightly from 5.4 to 5.3.
The company also saw its average revenue per customer drop $1 from $331 to $330, according to data released by the company.
Like most meal kit companies, Blue Apron spends a lot of money on marketing and discounts to lure customers in but struggles to hold on to them long term, with one study showing only 38% stick around past a few months.
Most meal kit companies saw an uptick in business during the height of the pandemic — along with grocery and meal delivery companies.
However, the grocery and foodservice industry has also been hit with increased costs as many ingredient prices have spiked and they struggle to hire and retain enough workers to keep operations going cost effectively.