What's going on?

HelloFresh, the German meal-kit delivery group backed by Rocket Internet, said it is targeting a valuation of up to �1.5 billion (about $1.76 billion) when its shares become available to the public this week in an IPO. The share price of American competitor Blue Apron has halved since its recent IPO, so it will be interesting to see how HelloFresh fares.

What does this mean?

HelloFresh puts recipes and their ingredients into boxed kits and delivers these to customers to cook at home. The company is active in ten countries and has shown strong revenue growth (it doubled in 2016), although it remains a loss-making company. It�s looking to raise between �243 ($286) million to �311 ($366) million to invest in expanding its business further. The company had planned an IPO in 2015 but canceled it amid concerns over the valuation it could achieve. Now, it�s trying again.

Why should I care?

For the stock: HelloFresh seemingly thinks it�s in a better place to IPO this time around.


With stock prices hovering around record highs on both sides of the Atlantic, momentum is strong at the moment. Rocket Internet, which owns a majority of HelloFresh, is hoping to repeat the success of one of its other companies, Delivery Hero, which completed an IPO earlier this year.

The bigger picture: Meal-kit delivery is a competitive space.


HelloFresh�s largest market is the US, and it says it will use the proceeds from its IPO to become the �clear number 1� meal-kit delivery provider in America. But the US is a tough market, as evidenced by Blue Apron�s poor stock price performance. There are various competitors and, potentially, a new huge competitor: following its acquisition of high-end grocery chain Whole Foods, Amazon filed a trademark application for prepared food kits in July.