Blue Apron shares make bland debut

Blue Apron Holdings Inc's shares rose as much as 4.6 percent in their debut on Thursday following the meal-kit delivery company's watered down IPO under the shadow of's deal to buy Whole Foods Market.

The stock touched a high of $10.46 in early trading, giving the company a market capitalization of about $2 billion.

The 30-million share offering was priced at $10 per share late on Wednesday, after the company slashed its valuation expectations by a third.

Blue Apron's IPO, the first for a U.S. meal-kit company, was expected to create a buzz around smaller peers, which are either looking to go public or be acquired at rich valuations.

However,'s $13.7 billion deal to buy Whole Foods Market Inc has left potential investors worried about the prospects of the meal-kit industry.

There are also concerns about the company's lack of profitability and marketing costs.

Like other meal-kit companies, Blue Apron has spent heavily on marketing to compete for customers who often switch from one service to another, or cancel their subscriptions altogether.

The company spent roughly 18 percent of its $795.4 million revenue in 2016 on marketing, posting a net loss of $54.9 million. It has also faced steep costs of building out delivery infrastructure for fresh food.

Blue Apron was founded in 2012 by Matthew Salzberg, Matt Wadiak and Ilia Papas to deliver ingredients and recipes that would allow customers prepare meals at home.

In 2014, the company started selling curated selections of cooking utensils and pantry items via its online marketplace, Blue Apron Market, and in September 2015, it expanded its culinary gamut to include wine.

The company bought BN Ranch, a supplier of beef, poultry and lamb, in February. (Reporting By Aparajita Saxena in Bengaluru; Editing by Anil D'Silva)