Shares in HelloFresh gained as much as 4% on their first day of public trading, valuing the German meal-kit delivery firm at more than double Blue Apron, the U.S rival from which it is rapidly seizing market share.
HelloFresh, majority-owned by German e-commerce group Rocket Internet, traded at 10.56 euros on Thursday at 1110 GMT, 3% higher than the 10.25 euro issue price announced by the company late on Wednesday.
HelloFresh sold 31 million new shares in an initial public offering, giving it a valuation around 1.7 billion euros at current prices—more than double the $888 million (763 million euro) market capitalization of struggling Blue Apron aprn .
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Shares in Blue Apron have suffered a 50% drop since its own IPO in late June. The stock was hit hard in July after Amazon.com registered a trademark for a possible rival service. Last month, Blue Apron cut 6% of its workforce.
The listing of HelloFresh represents a partial vindication for the company after it cancelled a planned 2015 IPO in which investors rejected a valuation above 2 billion euros at that time.
However, HelloFresh faces mounting competition from deep-pocketed rivals such as Amazon.com as it moves to increase food delivery services after acquiring the Whole Foods grocery chain in August. U.S. supermarket chain Albertsons acquired meal-kit rival Plated in September.
Both firms must spend heavily on marketing to win consumers to the concept of delivering pre-packaged ingredients to make home cooking more accessible. Marketing costs represent more than one-quarter of HelloFresh expenses, financial filings show.
HelloFresh remains loss-making but has narrowed its losses and pledged to break even on an operating profit level within 15 months.
HelloFresh, founded in Berlin six years ago, has enjoyed rocketing growth in the United States, which is by far its largest market, accounting for 60% of revenue in the first hald of 2017.
Its U.S. sales doubled to 263.4 million euros during the first six months of this year, while non-U.S. sales rose a subdued 8% to 172 million euros, according to its IPO prospectus. International operations range from Germany to Britain, the Netherlands, Canada, and Australia.
Its surging U.S. growth appears to be coming at least partly at the expense of Blue Apron, which held twice the market share of HelloFresh in 2015 and even as recently 2016, according to data from online audience measurement firm SimilarWeb.
Blue Apron’s split of online traffic in the U.S. market has dropped to 56% while HelloFresh has steadily risen to where it had 44% in September, SimilarWeb data showed.