Blue Apron’s up IPO is not a surprise, as unicorns fare well in 2017



Blue Apron’s IPO moved closer to reality this week as the firm set a price range for its shares. The company is set to go public at a higher IPO price than its last private round, undercutting worry that future unicorn IPOs may only point one direction: down.

The meal-kit startup may IPO at a price between $15 and $17. At midpoint, Blue Apron is worth “just under $3 billion” according to TechCrunch. At the upper-end of its range, Blue Apron’s value grows to $3.2 billion.

Notably, both valuations are above what Blue Apron was worth previously. This is no downer of an IPO.

Down

After a period of sharply positive sentiment regarding private tech companies, leading to the unicorn boom, uncertainty about potential public valuations and tighter markets led to concern about what would happen to late-stage tech shops looking to go public.

When Cloudera went public in late April, the stark difference between its last private round’s valuation and its IPO valuation was unsettling. It wasn’t a positive signal, and it wasn’t the first time that a company crossing the private-public divide landed on the other side of the chasm with a smaller valuation than it had started out with.

Down IPOs, like Box’s, say, are part and parcel of the current cycle’s picture.

The resulting sentiment led to a new phrase: Flat is the new upupupupup, and so forth. The implied follow-up to the point is that down is the new flat. Valuation humor aside, things aren’t as bad as you might have thought, at least regarding this year’s unicorn IPOs.

And Blue Apron’s own IPO cycle makes the point for us. Let’s take a look back at this year’s tech IPOs that were either worth around $1 billion (or more) when private, or worth at least that much when they went public. You might be surprised.

Unicorn Liquidity

First up, Alteryx, which wasn’t a unicorn at the time of its debut. However, it’s last private valuation was close to $1 billion, the company priced under that mark, and has since moved past the $1 billion valuation threshold into unicorn-land.

Alteryx

  • Last private valuation: “approaching $1 billion” (source)
  • IPO valuation: $732 million (source)
  • Current valuation: $1.088 billion (source)

Next up we have Cloudera, a company that has become a living reminder of how far private valuations can get ahead of public market results.

Cloudera

  • Last private valuation: $4.1 billion (source)
  • IPO valuation: $1.9 billion (source)
  • Current valuation: $2.2 billion (source)

Following Cloudera is Carvana, a firm that has seesawed dramatically since its own IPO. The firm has traded as low as $8.14 and as high as $20.43 per share over the short course of its life as a public company.

Carvana

Mulesoft has had a decent, if quiet, run. Here’s how it’s done since making its public debut.

Mulesoft

  • Last private valuation: $1.5 billion (source)
  • IPO valuation: $2.9 billion (source)
  • Current valuation: $3.27 billion (source)

Let’s take a look at yet another software shop, Okta.

Okta

  • Last private valuation: $1.2 billion (source)
  • IPO valuation: $1.5 billion (source)
  • Current valuation: $2.48 billion (source)

And now, Snap, everyone’s favorite bright yellow question mark.

Snap

  • Last private valuation: $19.3 billion (source)
  • IPO valuation: $23.6 billion (sourcediluted)
  • Current valuation: $21.0 billion (source)

And then there is Yext, a slower-growing but still notable tech company. The firm was just a mote under the $1 billion mark at its IPO, but has since crested the mark. As “one billion dollars” is squishy due to the changing value of the dollar, we’re granting ourselves enough room here to get Howard on the list.

Yext

  • Last private valuation: $525 million (source)
  • IPO valuation: $940 million (source)
  • Current valuation: $1.18 billion (source)

And then there was Appian, a quieter IPO that we need to keep an eye on. The firm reportedly crossed the $1 billion valuation mark ahead of its IPO, cut its price, and then made it back to whole.

Appian

  • Last private valuation: “Has Crossed $1 Billion Valuation” (source)
  • IPO valuation: $755 million (source, diluted)
  • Current valuation: $1.05 billion (source)

And last but not least, Blue Apron.

Blue Apron

  • Last private valuation: $2.135 billion (source)
  • IPO valuation: Around $3 billion, plus or minus depending on final pricing. (source)
  • Current valuation: See last private valuation.

Summing it up

Let’s see what we can shake out of all of this. Carvana, Mulesoft, Okta, Snap, and Yext have gone public and are now worth more than they were when private.

On the other side of that coin, Cloudera is sharply down, while Alteryx and Appian are too close to tell. Alteryx looks about flat, but we are not sure about Appian, given the lack of historical valuation data for the company.

Adding Blue Apron’s pricing estimate to the mix puts it on the plus side, among the larger tech IPOs on United States-based exchanges this year we have a mostly happy bunch.

That makes Blue Apron’s up IPO less surprising than I at least expected.

There is still road ahead for Blue Apron, most notably its road show which will not take place under the shadow of the massive, proposed Amazon-Whole Foods deal. It doesn’t seem that Amazon’s grocery ambitions will Instacart Blue Apron, but the M&A transaction matters regardless.

We’ll have charted results soon enough.



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