Blue Apron's VC backers have made gobs of money — while regular investors have taken a bath (APRN)

blue apron

Blue Apron has been decimated since going public in June, losing 35% of its value thanks to a direct assault from Amazon and troubling customer-retention issues.

The company, which was courting an IPO price of as much as $17 a share for a valuation of $3 billion in early June, has lost more than half of its value since then.

Blue Apron closed at $6.65 per share Wednesday for a market valuation of $1.32 billion.

That doesn't mean investing in Blue Apron has been a disaster for all of its backers, though. Three venture capital backers have still made gobs of money. Investors who put money into the company later down the road have lost out, in contrast.

Winners

Blue Apron's three early VC backers have still made a killing on the investment.

Business Insider estimated the returns of Blue Apron's largest backers, based on figures from the meal-kit company's IPO prospectus and ownership statements its largest investors' are required to file with the SEC.

Bessemer Venture Partners, which first funded Blue Apron in 2013 and has reupped at each funding round since, is the largest outside shareholder, with a nearly 23% stake. It's made $215 million, a roughly 800% return on the $26.7 million it has invested, according to Business Insider's calculations.

First Round Capital is up $98.7 million on its $7.6 million investment, a 1,398% gain, while Stripes Group is up a more modest $29.4 million on a $36.7 million investment for an 80% return.

Bessemer, First Round, and Stripes Group did not respond to requests for comment.

Losers

Fidelity, another big Blue Apron backer, has gotten slammed on its investment so far. The institutional investor, which manages trillions in capital for pensions and retirement accounts of millions of Americans, first bought into Blue Apron during its Series D round in 2015, throwing down $125 million and helping the food delivery startup earn its "unicorn" status with a $2 billion valuation.

Fidelity followed in May 2017 — just prior to the public offering — by purchasing $63.5 million in convertible notes, which converted into some 6.9 million shares at the IPO, according to the filings.

In all, Fidelity is down $80.2 million on the $188.5 million it has invested.

Of course, Fidelity is a long-term investor, and its holding in Blue Apron is a tiny portion of its holdings, especially compared with venture investors. Even if Blue Apron never recovers, Fidelity won't feel much of an impact.

"As a general practice we don’t comment on specific holdings. That said, our portfolio managers look to invest in companies that they believe are good long-term opportunities for shareholders," Fidelity spokesman Jeff Cathie told Business Insider in an email.

Cathie continued (emphasis added):

"Private investments are very small positions in the relatively few Fidelity funds that make such investments. For example, as of its most recently disclosed holdings (May 31, 2017), the Fidelity OTC Portfolio’s investment in Blue Apron represented 0.089% of the fund’s approximately $15 billion in asset under management. And by-the-way, this fund is significantly beating its benchmark (the Nasdaq Composite) and 100% of its Morningstar peers on a 1-, 3- and 5-year basis."

And of course, investors who bought in at the IPO and still hold the shares have taken a paper loss of more than 30% in a matter of weeks.

That's the point

This is sort of the whole point of VC investing: Get in very early on a number of promising investments when the risk is outsized, and then get paid out exponentially for taking that risk when one of those investments hits.

Although these funds are up on this investment, they stood to make as much as 2.5 times more when Blue Apron first filed for its IPO. Bessemer's $215 million return looks fantastic, but the firm, which manages $4.5 billion in assets, was up more than $500 million a couple months ago.

And the VCs could be taking losses on the rest of their bets, so it doesn't guarantee the fund is thriving overall.

Since none of these firms have sold their stakes yet, these returns are still "paper" only and could change significantly by the time the funds exit.

Here's a detailed breakdown of how each firm's investment has fared so far, based on the SEC documents:

Note: Figures are rounded. Calculations use the stock price as of market close July 19 — $6.65 a share.

Bessemer Venture Partners return: $215 million (+800%)

Investments

Series A preferred stock: 295,546 shares for $5.84 million
Series B preferred stock: 350,153 shares for $3.9 million
Series C preferred stock: 725,528 shares for $12.1 million
Series D preferred stock: 375,181 shares for $5 million

Shares after IPO conversion: 36.29 millio

Return

Total invested: $26.7 million

Value of stake as of July 19: $241 million
Return: $215 million (804%)

Note — Preferred stock converts to common stock as follows:

• Series A on a 50-for-1 basis

• Series B on a 50-for-1 basis

• Series C on a 5-for-1 basis

• Series D on a 1-for-1 basis

First Round Capital return: $98.7 million (+1,398%)

Investments

Series A preferred stock: 199,323 shares for $1.1 million
Series B preferred stock: 87,538 shares for $961,491
Series C preferred stock: 326,325 shares for $5.5 million
Series D preferred stock: 7,504 shares for $100,000

Total shares after IPO conversion: 15.98 million

Return

Total invested: $7.6 million

Value of stake as of July 19: $106.3 million
Return: $98.7 million (1,398%)

Stripes Group return: $29.4 million (+80%)

Investments

Series A preferred stock: 1,801 shares for $180,100
Series B preferred stock: N/A
Series C preferred stock: 1,894,370 shares for $31.56 million
Series D preferred stock: 375,181 shares for $5 million

Total shares after IPO conversion: 9.94 million

Return

Total invested: $36.74 million
Value of stake as of July 19: $66.1 million
Return: $29.4 million (80%)

See the rest of the story at Business Insider