Meal kit provider HelloFresh is in headlines this week with bold plans for an initial public offering (IPO) on the Frankfurt Stock Exchange—plans that could see the company earn a $1.8 billion dollar valuation.
HelloFresh, which calls itself “the only meal kit service of scale with an intercontinental footprint,” has announced plans to target 250-300 million euros (approximately $290-355 million) in IPO funds for continued investment in its long term growth.
“The public listing marks the next logical step to further expand our business, to secure our position as the leading global player and to pursue our long-term growth strategy,” said Dominik Richter, Co-Founder and CEO, in a company announcement. “In 2011, we started with the mission to change the way people eat. Since then, we have built a dynamic, data-driven organization with scalable production processes across ten international markets. “We have established a brand loved by millions of loyal customers. We have experienced fast growth and have the strategic goal to reach breakeven across our group within 15 months. Now, the time has come to propel HelloFresh to the next level.”
According to its press release, HelloFresh employs more than 2,000 employees, offers millions of households the opportunity to enjoy well-balanced home-cooked meals without the associated hassle, and is “the largest player worldwide with #1 positions in all of its major markets outside the U.S."
Currently operating in ten countries, including the USA, the United Kingdom, Germany, the Netherlands, Belgium, Luxembourg, Australia, Austria, Switzerland, and Canada, HelloFresh delivered roughly 33.7 million meals to 1.3 million customers in the second quarter of 2017 alone. With a disruptive direct-to-consumer food company, based on a data-driven business model, a strong brand, and an innovative supply chain set-up, the company has, it hopes, primed itself for continued growth and unprecedented success in the meal kit market.
“We have pioneered an entirely new category,” noted Thomas Griesel, Co-Founder and COO. “Today, we are in an ideal position to seize the growing potential of our global market by capitalizing on our customer-centric product innovation expertise, our technology platform, our vertically integrated supply chain, and our scalable, state-of-the-art fulfilment capabilities.”
The company noted that it is “one of the fastest growing players in the global EUR 7.5 trillion food market,” and with continued margin improvements, HelloFresh hopes to breakeven in 15 months.
Boasting fresher food than competitors and a streamlined structure, HelloFresh sources more than 50 percent of its offerings from local producers. The company has also built a significant infrastructure, too, with seven fulfilment centers around the globe primed to meet growing consumer demand.
“We have a very dynamic market development in our category, which we want to fully capitalize on by raising about 250 to 300 million euros of primary capital through an IPO,” added Christian Gärtner, CFO.
News source Reuters reported that, should HelloFresh’s plans succeed, the IPO flotation would value the meal kit company at up to $1.8 billion. The news source also added that the valuation would be a significant leap forward for the meal kit industry after a disappointing IPO saw Blue Apron’s valuation eventually shrink to $980 million.
With an IPO primed to value HelloFresh at well over $1 billion, the company is hoping to be the first veritable unicorn in the meal kit category. Will it succeed in its hopes? Deli Market News will keep you posted.