Wonder Group, the food-delivery startup led by former Walmart executive Marc Lore, is set to acquire meal-kit company Blue Apron. Blue Apron shareholders will receive $13 in cash per share of Class A common stock in the deal, valuing the company at approximately $103 million. This represents a premium of more than 130% compared to the Thursday closing price but is significantly lower than its initial public offering price in June 2017.
Blue Apron, based in New York, pioneered the concept of delivering fresh ingredients for convenient home-cooked meals but faced challenges in boosting sales and customer retention over the years. Supply chain issues, fluctuating ingredient costs, and intense competition in the meal-kit market contributed to its struggles. Although Blue Apron conducted a strategic review during the COVID-19 pandemic in 2020, it did not pursue a sale at that time.
In late 2022, Blue Apron made workforce reductions of around 10%, and in June, it reached an agreement with FreshRealm, a fresh meal delivery company, to transfer its fulfillment centers, equipment, and some staff in exchange for up to $50 million in much-needed cash. FreshRealm, which now holds about 16.5% of Blue Apron’s Class A common stock, has agreed to exercise its warrant as part of the Wonder Group transaction.
Wonder Group, founded in 2018, initially aimed to create a network of truck-based restaurants offering chef-inspired curbside meals. However, it later shifted its focus to a more cost-effective restaurant-delivery model involving a network of kitchens. As of now, Wonder operates four physical locations, with plans to reach 10 by the end of the year. The company was valued at approximately $3.5 billion following a $350 million funding round in June 2022.
Marc Lore, known for selling startups to industry giants, sees the Blue Apron acquisition as a step toward creating a “super-app” for mealtime. Wonder intends to continue Blue Apron’s existing operations and retain the brand.
Lore’s previous successes in the retail industry include selling Quidsi to Amazon for $500 million in 2010 and Jet.com to Walmart for $3.3 billion in 2016. After joining Walmart to oversee its U.S. e-commerce business, Lore eventually departed in early 2021 and took the helm at Wonder. He has since strengthened Wonder’s leadership team by appointing Kelley Morrell as Chief Financial Officer, a former Blackstone executive, and Daniel Shlossman as Chief Growth and Marketing Officer, formerly with Sweetgreen.
(Source: Jordan Valinsky | CNN | Lauren Thomas | WSJ)
