Food delivery startup HelloFresh has widened its losses in the first half of 2017, even as it reportedly preps for an autumn float.
The firm posted a bigger loss for the six months to June 30, at €57.4 million (£52.2 million) That’s up from its €52.9 million (£48 million) loss a year ago.
Most of that’s attributable to HelloFresh’s ballooning marketing costs, which rose from €80.5 million (£73.3 million) last year to more than €123 million (£112 million) for the first half of 2017. The company now has 1.25 million active customers, up from 800,000 a year ago.
Its fulfillment costs — what the firm spends on logistics and shipping — also went up, from €118 million (£107 million) to €162 million (£147 million).
The company has some €113 million in the bank (£103 million), plus €30 million (£27 million) available in bank loans. It delivered 33.7 million meals during the period, up from 22.7 million last year.
HelloFresh is pegging its hopes for profitability on rapid expansion, now operating in the US, UK, Germany, and six other markets. The company initially wanted to go public in 2015, but pulled its offering for lack of investor appetite.
Even if the firm goes public in the autumn, it will have to tackle dampened interest due to rival Blue Apron’s IPO performance. The company’s stock has been crushed since it first started trading, as it reported rising costs, waning customer interest, and Amazon entered the market.
Business Insider has previously analysed how much HelloFresh’s marketing and fulfilment costs are spiralling:
In a press statement on HelloFresh’s first half earnings, chief executive Dominik Richter called out the firm’s strong revenue growth.
“The strong growth of HelloFresh is an impressive testament to our expertise as a leading food company with a clear focus on customer satisfaction,” he said.”We are following our long-term strategy, and are pleased that the business is developing as planned. We will continue on this path in future.”
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