As the whole world heard about, Amazon announced it was buying Whole Foods for $13.7bn, which, with its Prime Customer base, sets up a great opportunity to take over the food delivery industry. This makes very bad timing for Blue Apron to start the IPO process.
With Amazon now casting an anticipatory shadow over the “Fresh food to urban yuppie home delivery” sector, Blue Apron is caught in a really gnarly Catch 22. Its IPO only makes sense if people believe that its business model can drive revenue and maybe create profit, but if that model can indeed drive revenue, what’s to stop Amazon from copying it using 80 million Prime subscribers and the vast coverage of Whole Foods distribution network? Especially since Amazon has an almost heretically long-term dogma when it comes to revenue turning into profit.If you’re a canny investor who thinks Blue Apron might actually be onto something, Friday’s announcement has got to make you think of taking all your belief in Blue Apron and turning into a buy order…on Amazon stock.
I think this is missing a few advantages that Blue Apron has over Amazon, mainly its small size allowing for quicker reactions to market changes than the online behemoth, and when investing in Amazon, you’re investing in the whole company, you cannot just chose to own X, Y, and Z parts of their business.
Part of Amazon’s plan with Whole Foods is to get rid of its expensive image, so could Blue Apron secure a portion of the food delivery market before Whole Foods is able to change its reputation? Do you think Blue Apron is just aiming to sell to Amazon down the line? What are your thoughts?
