According to research from Second Measure, the US meal kit market is worth $5 billion and is led by Blue Apron with a 57.5% market share. Early this month, Billion Dollar Unicorn HelloFresh , which has a market share of 28.4%, listed successfully on the Frankfurt exchange. While Blue Apron’s market share is plummeting, HelloFresh is on the rise.

Photo Credit: SITS Girls/Flickr.com

HelloFresh’s Offerings

Berlin, Germany-based HelloFresh was set up by London Business School alumni Dominik Richter and Thomas Griesel in 2012. It began offering locally sourced and pre-portioned ingredients to help consumers prepare home-cooked meals each week. Initially, it targeted Berlin, Amsterdam, and London, the highest density population areas in Europe. Soon enough, the product was liked so much that they began getting requests from people outside the markets that they were serving. By the end of the year, HelloFresh had expanded into the US as well.

HelloFresh’s Financials

HelloFresh’s subscription service starts from as low as $8.74 a meal, which serves up to two adults and two children. Its revenues have grown significantly in the past few years.

For the recent third quarter, HelloFresh reported revenue of €217 million ($257 million), up 48%. Gross profit increased 55% to €130 million ($154 million). Operating loss declined slightly to €23 million ($27 million). Adjusted EBITDA declined to negative €17.4 million ($20.6 million).

Its revenue growth was driven by growth in its active customer base from 0.84 million to 1.28 million. Its average customer order rate grew slightly to €3.63 ($4.3).

Region-wise, its US segment showed strong improvement of 77% to €131 million ($155 million). Number of active customers almost doubled to 0.79 million from 0.41 million a year ago.

For the full year 2016, its revenue nearly doubled to €597 million ($708 million). Gross profit increased 113% to €340 million ($403 million). Operating loss declined from €115.5 million ($137 million) in 2015 to €90.5 million ($107 million) in 2016.

The strategic goal of the company is to balance growth and profitability and reach adjusted EBITDA break-even across the group in Q4 2018.

Early this month, HelloFresh listed successfully on the Frankfurt Stock Exchange, trading 4% higher than the list price on the first day itself. It raised $420 million from an offering of stocks valued at €10.25 (~$11.91. Its stock is currently trading at €10.12 with a market cap of $1.64 billion.

Prior to listing, HelloFresh had raised $364 million from investors including Baillie Gifford, Rocket Internet, Insight Venture Partners, Phenomen Ventures, HV Holtzbrinck Ventures, Investment AB Kinnevik, and Vorwerk Direct Selling Ventures. Its last round of funding was held in December 2016 when it raised €85 million at an undisclosed valuation. Analysts estimated its valuation at nearly $2 billion, significantly lower than its 2015 valuation of $2.9 billion.

Unlike rival Blue Apron, HelloFresh has managed to somewhat rein in its losses and fare better in the public market. It remains to be seen if this performance will be sustained in the face of the looming threat of Amazon, which recently acquired grocer Whole Foods.