Blue Apron shares hovered near their IPO price on Thursday, a slow start for a highly anticipated IPO. The meal-kit delivery start-up made its trading debut on the New York Stock Exchange under the symbol "APRN" on Thursday morning. Though the stock inched up in initial trading, briefly touching $11, shares pared gains Thursday afternoon. The stock closed at $10, its opening price. Shares shed a penny to $9.99 after hours before rebounding. The company priced its IPO at $10 a share on Wednesday evening, the low end of the expected range of between $10 and $11 per share. With an offering of 30 million shares, the company is looking to raise about $300 million in its IPO.

Traders work on the floor of the Exchange ahead of the Blue Apron IPO on the New York Stock Exchange in New York, June 29, 2017 Lucas Jackson | Reuters

Amid growing concerns over the impact of tech giant Amazon's pending acquisition of Whole Foods Market, the company lowered its expected IPO range on Wednesday, down from the $15 to $17 range it had initially forecast. The move was unusual, as only 4 percent of internet IPOs have revised their range downward since 2010, according to Dealogic. "We're tackling a huge market, and we're focused on the long term, quite frankly," CEO Matthew Salzberg told CNBC's "Squawk on the Street" on Thursday. "The stock price today, whether it's up, down, left or right, is really just the beginning of this new chapter in our company's life."

A tepid entry in a hot IPO market

At $10 a share, the IPO should value the company around $1.89 billion. The unicorn start-up was valued around $2 billion in the private market, according to CB Insights estimates. Major investors include Fidelity, Bessemer Venture Partners, and First Round Capital. The company's Series D round was priced around $13.33 a share in the private market, according to regulatory filings. Still, the company's revenue has exploded in the past few years, growing from $77.8 million in 2014 to $795.4 million in 2016. Over a 3-year period, Blue Apron generates $900 to $1,000 per average customer, Salzberg said. The proceeds from the IPO will go into investing in automation and supply chain technology, as well as expansions into meal kits that cater to more specific occasions and dietary needs, Salzberg said. "The unit economics for what we do are really incredible and very strong," Salzberg said. The offering comes on the heels of fellow unicorn Snap, which went public earlier this year in a highly anticipated IPO. The number of U.S. IPOs priced this year has risen nearly 79 percent from a year ago, according to Renaissance Capital, while the total U.S. IPO proceeds have risen over 220 percent year over year. But Snap, for example, rose 44 percent on its first day of trading. "This wasn't a special moment where we needed to go public right now," Salzberg said. "Since ... the very first day, we wanted to be the kind of company that could be a public company. The kind of caliber of company that's going after a big enough opportunity, with a long enough orientation, and ambitious enough business plan."

A challenging business model with the lure of high rewards

Blue Apron is one of several start-ups attacking the food delivery business, but the first to IPO. The company's business focuses on delivering refrigerated, portioned ingredients for particular recipes. About 12 percent of U.S. grocery shoppers bought their groceries online at some point in 2016, according to Cowen and Company. But it's a market that could potentially boom, according to research by NPD Group. "It makes perfect sense that as online grocery shopping grows it will drive the adoption of meal kits," Darren Seifer, food and beverage industry analyst at The NPD Group, said in a statement. "Online grocery shoppers can save time by not having to search through multiple websites, and they both work hand-in-hand in meeting the consumer's need for convenience with the delivery of a fresh meal they can prepare at home." That said, there is fierce competition for those food delivery dollars, including from technology behemoth Amazon. Amazon agreed to buy Whole Foods in a $13.7 billion deal announced earlier this month. The acquisition builds on Amazon's burgeoning grocery store business, and delivery business Amazon Fresh. Blue Apron, meanwhile, has posted steeper net losses each year since 2014, according to regulatory filings. An expose by BuzzFeed News last fall highlighted extreme stress in Blue Apron's packing facilities, where logistics were reportedly a struggle. Rivals have had their fair share of strife. Within the last two years, delivery app SpoonRocket was acquired, Danny Meyer-backed Umi Kitchen stalled out, citing "the trickiness of making delivery economics work out for everyone involved." Instacart workers have staged public protests about falling tips, as the CEO is openly pinching pennies. Analysts have pushed back on Square's Caviar business. GrubHub shares have been dinged by rumors that Facebook is entering food delivery. But Salzberg said that unlike a grocery store, which distributes food, he sees Blue Apron's meal kits as proprietary products, sourced from Blue Apron farms and wineries. As more companies, including Amazon, promote online food shopping, Blue Apron could benefit, Salzberg said. — CNBC's Leslie Picker, CNBC's Christine Wang and Reuters contributed to this report.

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