HelloFresh Aims for $1.8 Billion IPO Valuation

Updated on
  • Meal-kit startup sets 9-11.50 euro price range for share sale
  • Share sale comes as rival Blue Apron continues to struggle

HelloFresh Targets $1.8 Billion Valuation in IPO

HelloFresh, the meal-kit startup backed by Rocket Internet SE, is targeting a market valuation of as much as 1.5 billion euros ($1.8 billion) in an initial public offering this week, the company said in a statement Sunday.

The company, which sells meal kits in 10 markets and remains unprofitable, set a price range of 9 to 11.50 euros a share. It’s looking to raise 243 million to 311 million euros to invest in expanding its business. The shares are expected to start trading in Frankfurt Nov. 2.

HelloFresh Chief Executive Officer Dominik Richter said the company wanted to “become the clear No. 1 player on the U.S. market in 2018.” The company, which has about 1.3 million active customers, is seeking to break even within the next 15 months, he said.

The IPO will test investor appetite for food-delivery businesses just as Amazon.com’s purchase of Whole Foods Markets Inc. threatens to upend the industry. Rival Blue Apron Holdings Inc., whose value has dropped by about half since its June public offering, cut 6 percent of its workforce this week. Amazon itself has filed a trademark application for prepared food kits, and grocery chain Albertsons Cos. paid about $200 million to buy meal-kit delivery company Plated.

Rocket Internet, which owns about 53 percent in HelloFresh, was down 2 percent to 20.98 euros in Frankfurt as of 9:17 a.m. local time.

HelloFresh has told investors that it will overtake Blue Apron in the U.S. by the third or fourth quarter, according to an investor presentation seen by Bloomberg News. HelloFresh generated sales of 143 million euros in the U.S. in the second quarter, up from 120 million euros in the first three months of the year.

“We have huge momentum in the U.S. market and are poised to overtake our biggest competitor in the near term,” HelloFresh wrote in its presentation for potential IPO investors. “We have out-executed Blue Apron across all dimensions.”

HelloFresh had planned an IPO in 2015, after a funding round that valued it at 2.6 billion euros, but shelved the stock sale amid concerns about investor demand and valuation in a volatile market, people familiar with the matter said at the time. HelloFresh assembles ingredients into boxed meal kits and seeks to convince customers of the benefits of cooking at home.

Deutsche Bank AG, JPMorgan Chase & Co., Morgan Stanley, Berenberg and BNP Paribas are lead managers on the IPO.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE