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Blue Apron launches IPO roadshow under shadow of Amazon's Whole Foods deal

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Blue Apron delivery service

Blue Apron is inching ever closer to its impending initial public offering. If stocks sell at the high end of Blue Apron's price range - $17 each - that would raise $580 million and give it a market value of about $3.2 billion. It will probably begin trading this summer. That's up from a valuation of $2 billion the last time Blue Apron raised money from private investors, in 2015. The company has seen continued success in subsequent years. While revenue more than doubled previous year, Blue Apron is still losing money as it fights to win customers from competitors.

But even with people saying that this thing is maybe worth just over a quarter of what they thought it was worth two years ago, Blue Apron might still be shooting for the moon.

The firm brought in nearly $800m in revenue in 2016, though it ended the year with a loss of more than $54m, according to the filing. The company lost $52.2 million more in just the first three months of this year.

With Amazon gaining access to Whole Foods' roughly 400-store footprint, the e-commerce juggernaut would command a distribution network dwarfing that of any meal-kit service.

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The stocks of other supermarket companies plunged because of competitive fears, as did the stocks of mass-market retailers with big grocery units - most notably Walmart, Target and Costco.

"Meal kits require a very different business model than a grocer like Whole Foods brings to Amazon, and I do not think Amazon will be able to leverage that asset to do meal kits", Pfrang said. The company lost $55 million in the whole of 2016.

"Business combinations and consolidation in and across the industries in which we compete could further increase the competition we face and result in competitors with significantly greater resources and customer bases than us", the company added to its prospectus.

Blue Apron's management plans to stress that its business model is different from the basic grocery delivery now offered by Amazon's Prime service and Whole Foods' partnership with Instacart, said the person, who asked not to be identified because the details are private.

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