Morning Report: When the market has lost faith in your ability to grow, simply shrinking not as quickly as expected is a win. Just ask 2017 unicorn IPO Blue Apron.
Even as a leading light of the growing meeting point of technology, subscription and direct-to-consumer commerce, Blue Apron’s public debut last year was a mess. The firm was forced to price far below expectations, and from that lowered perch, Blue Apron shares shed most of their value as the year went along. The company started the year off nearly 70 percent from its IPO price.
But in 2018, the firm has posted an earnings result that beat expectations. We’ll examine the Q4 numbers in a moment, but the company’s earnings were so strong that shares of the meal kit firm were up over 7 percent in pre-market trading. When the market opened, Blue Apron kicked off the post-earnings session up 9.85 percent.
Blue Apron’s revenue fell 13 percent to $187.7 million in the quarter, above an expected $185.1 million in Q4 top line. The firm’s $39.1 million net loss generated a $0.20 per share deficit, less than the expected -$0.27 result.
So Blue Apron shrank, but less than expected. It also lost money, but, again, less than expected. That’s a rare form of double beat, really. Still, for the struggling company, any form of victory must be welcome.
The firm’s falling customer base is something to behold. In the third quarter of 2017, Blue Apron reports that it had 856,000 customers. In the following quarter, the most recent fourth, the company reported just 746,000. That pace of net churn comes after the firm spent an (admittedly reduced from year-ago tallies) $25 million on marketing in the quarter.
In regular trading, shares of Blue Apron competitor HelloFresh were off a fraction.
From The Crunchbase Daily:
- U.S. tech IPOs are off to a better start this year than last. But things still look pretty slack, with four tech offerings on U.S. exchanges so far and some big-name IPO candidates like Airbnb delaying plans for a 2018 debut. Post-IPO performance, meanwhile, has been mixed.
- Seed stage investor Homebrew has raised $90 million for a third fund, its largest to date. The San Francisco firm plans to back six to eight technology startups per year out of the fund.
- Customer and business support technology provider UJET closed a $25 million Series B round led by Google’s GV. The financing brings total funding to over $45 million.
- In less than eight years, China’s Xiaomi has grown from nascent startup to one of the top five global smartphone vendors and a likely prospect for this year’s biggest tech IPO. Crunchbase News takes a look at how the company rose so far, so fast.