Blue Apron Purchased By Virtual Food Hall Chain For $103 Million
On Friday, virtual food hall chain Wonder bought meal kit delivery service Blue Apron for $103 million, $13 per share. Per an official statement, the "definitive merger agreement" was unanimously approved by Blue Apron's Board of Directors. The deal will close in fiscal Q4 2023. For now, Blue Apron is going to stay "Blue Apron," but it will operate under and in congruence with Wonder. (Fans can expect to see some shifting in the mobile app and logistics of delivery.)
In case you haven't heard of it before, Wonder is a mobile restaurant delivery service founded by Marc Lore, the billionaire entrepreneur behind Diapers.com (which was later sold to Amazon) and Jet.com (which was sold to Walmart). In other words, Lore is no newcomer to the multi-platform retail scene, and Wonder has been growing rapidly since its conception in early 2022. As of July 2022, the fledgling company was already valued at $3.5 billion and has worked with such esteemed partners as Chef José Andrés, Bobby Flay, Marcus Samuelsson, and more. Blue Apron, on the other hand, hadn't been doing so great.
When it went public six years ago, Blue Apron was valued at $2 billion. Now, this $103 million sale is kind of a bummer way to end the era. Still, the company had been looking for a tide shift for some time leading up to the deal. In May, CEO Linda Findley announced that Blue Apron was "actively pursuing all options available to us," via MarketWatch.
Breathing fresh life into an old concept
When Blue Apron launched in 2017, it was one of the first meal kit services on the global market. But, since then, it's been struggling to stay afloat, losing customer traffic and laying off employees. By 2022, revenue fell to $458 million, with just 267,000 customers by Q2 2023. This pioneer has been outpaced by meal kit service competitors. As of 2021, HelloFresh (which came to the U.S. in 2013) has roughly 3.5 million U.S. customers and is expected to hit a valuation of $25.6 billion by 2027.
The way Wonder's current business model works is that customers online-order their meal, which is prepared on-site in a Wonder location. Then, customers can choose to either dine in, pick up, or have the meal delivered to them. Looking forward, Lore has big plans for Wonder (and, by extension, for Blue Apron), describing a vision for a 7,000-unit enterprise with meal kits, made-to-order food, and groceries. Via a statement, Lore says the purchase of Blue Apron immediately "accelerate[s] our strategic position" for creating the "leading platform for mealtime."
Wonder currently has four locations in New York and New Jersey but intends to increase that number to 10 by the end of 2023. Prior to the purchase, Wonder mostly dealt with restaurant delivery, and if the company aims to expand its limited market reach, this Blue Apron purchase is a big step in the right direction.