July 17, 2017
Alex Wilhelm is the Editor in Chief of Crunchbase News, covering the intersection of startups and money.
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Morning Report: Blue Apron set a new low this morning. Let’s quickly examine the carnage. (Notably, Blue Apron may become a no-more-icorn in a few more trading sessions if the selloff continues.)

Recalling that only about a fourth of 2017 tech IPOs are underwater, Blue Apron currently stands apart from its freshman class by being the furthest in the deep.

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Tintri is off a mere $0.02 from its $7 price. Snap is mired at $15.36 after going public at $17 and racing to nearly double its current tally. And Blue Apron takes the cake, off 33.50 percent, inclusive of a 9.65 percent decline today to $6.65 per share. The company initially priced at $10.

But that decline is only the half of what’s under the hood for Blue Apron. A few things, quickly:

  • Blue Apron needed to raise capital in its IPO. Both to pay for its operating losses and, presumably, to avoid raising more capital through debt.
    • The firm generated $6 million of cash from operations in the first quarter of 2016. In the first quarter of 2017, it burned $19 million to fund its operations.
    • Regarding debt, the firm noted in its S-1/A that it “did not have any debt prior to 2016,” but that its “[l]ong-term debt, net of debt issuance costs, was $44.5 million as of December 31, 2016 and $99.6 million as of March 31, 2017.”
  • Greatly diminished IPO proceeds limited its cash infusion, which doesn’t cross well with its rising “Contractual Obligations,” as its SEC filings put it, which ramp from $14.2 million in 2017 to $57.2 million in 2019.
  • The company went from GAAP profitable to deeply not.

Before we sum the above into predictions, bear in mind that Blue Apron wanted to raise up to 70 percent more than it did in its IPO. (There some nuance there regarding the potential greenshoe offering, but we can leave that aside for now.) But the company’s initial top-end range of $17 per share became $10. The gap up from 10 to 17 is huge.

To sum: Blue Apron raised (net) less than $300 million in its IPO, and it has shown an appetite for operating cash and long-term debt. Therefore, it may need to raise more from the markets at some point if it can’t return to at least operating cashflow break even. And that’s the rub.

Blue Apron is off another nine points today. Its potential future cash is being priced more expensively in terms of dilution by the market precisely as its current value gets knocked about.

Thanks, Jeff.

From the Crunchbase Daily:

Desktop Metal raises $115M for 3D printing

  • Desktop Metal, a developer of 3D metal printing systems, has raised $115 million in a Series D round backed by New Enterprise Associates, GV, Future Fund, Techtronic Industries, and others. The financing brings total funding for the two-year-old, Burlington, Mass-based company to more than $200 million.

Grab said to seek $2B

  • Singapore-based Grab, Uber’s biggest rival in Southeast Asia, is in talks to receive an investment of up to $2 billion from Softbank and China’s Didi Chuxing, according to a Wall Street Journal report citing unnamed sources. The investment could value Grab at more than $5 billion.

Juicero cuts staff

  • Juicero, the heavily-funded provider of pricey juicing machines and fresh-cut juice packs, is cutting 25 percent of its staff amid a broader strategic shift aimed at reducing prices, Fortune reports. The move follows revelations several months ago that customers could squeeze the company’s juice packs by hand without needing to use its $400 machines.

Female founders aren’t raising more funding

  • Just 17 percent of venture and seed funding in the first half of 2017 went to companies with at least one female founder, according to a Crunchbase News analysis. That’s a stat that hasn’t changed for five years, even as stories of gender bias generate more attention.
  • Meanwhile, in other news, Crunchbase interviews John Doherty, CEO of marketing software startup Credo.