HelloFresh, a company that sells fresh food meal kits, is apparently seeking to go public in an IPO on the Frankfurt Stock Exchange on 2nd November.
Currently owned by Rocket Internet SL, the German company is waiting for the publication of its third-quarter earnings and the opportunity show investors continuing growth before announcing its intention to float, according to Bloomberg.
While the IPO would value the company somewhere between €1.5bn and €2bn, and HelloFresh itself has now made a statement confirming the intention to float. Chief Executive Dominik Richter has stated that “we have seen tremendous success and market share gains in the US in the last few quarters. We now intend to use the proceeds from the IPO to continue expanding our market share and become the clear No. 1 player on the US market in 2018.”
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Competitor Blue Apron went public in June 2017 and since then has lost much of its value, partly due to strong competition – Amazon.com Inc bought rivals Whole Foods Market Inc, while costs continue to rise, putting a strain on businesses of this type. A further sprinkle of doubt is added as HelloFresh pulled an IPO in 2015 and yet remains unprofitable.
The business model of encouraging customers to cook food at home is a difficult sell and faces competition from companies delivering fully-cooked meals, with businesses like Deliveroo, Delivery Hero, UberEats and Just Eat giving customers access to more restaurant food than ever before, all from the comfort of their own living room.
The silver lining
HelloFresh has been quick to distance itself from Blue Apron’s issues, and can point to strong growth in the second quarter of 2017, when it increased sales by 53%. If it can report further growth for Q3, this could prove the secret ingredient for an IPO as far as investors are concerned.
Additionally, Rocket Internet has had recent success in the IPO sphere, having also backed the Delivery Hero IPO in June this year. Delivery Hero shares have risen 40% since the company went public – the type of growth investors in HelloFresh would hope to see.
Will it go ahead? Keep your eyes peeled for more news.