Blue Apron, Nearing $100 Million Run Rate, Will Move to Giant New Warehouse
New York City-based Blue Apron is one of the fastest-growing food-delivery startups around. Now it has signed a lease for a big new warehouse to accommodate future growth.
Blue Apron will move its fulfillment operations this summer from an over-capacity warehouse in Brooklyn to a 120,000-square-foot building in Jersey City, N.J. The company has asked the 83 full-time employees who work in the Brooklyn facility to make the move to Jersey. The company says it will look to add 300 more positions once it moves into the new space.
Blue Apron is perhaps the best known venture-backed “meal kit” company in the U.S. Each week, it sends customers a box that includes several recipes along with the precise amounts of ingredients needed to create each dish.
Two years after launching, the company is approaching a $100 million annual run rate, according to two people familiar with its finances. But it will face two big challenges as it looks to grow into, and surpass, the $500 million valuation it secured in a recent $50 million investment round.
First, with any new category of subscription, there is the risk of significant customer churn as new customers try out the service and subsequently decide it’s not for them. CEO Matt Salzberg said the company’s churn rates “are not a problem” but declined to divulge what they are.
Second, it’s hard to know right now how big a market Blue Apron is operating in. Salzberg likes to say that the Blue Apron market opportunity involves taking business from any other company that sells groceries or ready-to-eat meals.
“We’re really competing against the Whole Foods and Seamlesses of the world,” he said.
That may be overly optimistic. But Blue Apron will soon have the space to try to make Salzberg’s vision a reality.