Loss-making online meal
delivery firm HelloFresh plans flotation
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[October 28, 2015]
By Arno Schuetze and Alexander
Hübner
FRANKFURT (Reuters) - Loss-making "ready to
cook" meal delivery company HelloFresh is readying a Frankfurt stock
market listing that looks to capitalize on its rapid global expansion,
rising consumer demand for convenience and investor appetite for tech
flotations.
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The Berlin-based company is likely to sell shares worth at least 300
million euros ($331 million), two people familiar with the deal said
on Wednesday.
HelloFresh delivers meal ingredients and recipes for dishes such as
cheeky chicken chow mein and warming lentil moussaka, priced as low
as 4 pounds ($6) apiece, to subscribers in seven European countries,
as well as in Australia, Canada and the United States.
Majority owner Rocket Internet, a global e-commerce investor, said
HelloFresh was planning to sell newly issued shares in a capital
increase.
HelloFresh also said revenue swelled 384 percent to 198 million
euros in the first nine months of 2015, while losses rose to 58
million from 8.5 million a year before.
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It said it was expecting fourth-quarter revenue to top the previous
three months by between 15 and 20 percent and intends to use the
proceeds of its forthcoming initial public offering (IPO) to fund
growth.
"In only four years, we have managed to disrupt the traditional food
supply chain and build a global company," co-founder and CEO Dominik
Richter said.
HelloFresh's offering comes after digital classifieds group Scout24
was able to complete its float as planned in wobbly markets.
By contrast, companies like container shipper Hapag-Lloyd [HPLG.UL],
plastics maker Covestro and automotive supplier Schaeffler have had
to curb their capital-raising ambitions due to waning investor
demand.
In the third quarter, HelloFresh delivered 13 million meals to its
530,000 active subscribers, up from 3.2 million meals and 115,000
subscribers in the year-earlier period.
Last month, HelloFresh was valued at 2.6 billion euros in a funding
round, while U.S. peer Blue Apron, which sells 3 million meals per
month, in June secured funding which valued it at more than $2
billion.
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The "ready to cook" meal delivery craze has already featured its
share of failed start-ups, as several early California-based
start-ups including Pop-Up Pantry, Chefler and Fresh Dish shut down
over the past two years.
Remaining U.S. players face competition from similar companies such
as Munchery, which has raised $117 million in venture financing. It
got its start delivering pre-made chef-made meals but is now moving
into the make-you-own-meal market.
Goldman Sachs and Morgan Stanley are organizing the IPO with the
help of JP Morgan and UBS.
($1 = 0.9063 euros)
($1 = 0.6538 pounds)
(Editing by Maria Sheahan and David Holmes)
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