Exclusive: Blue Apron raising new funds at $500 million valuation

April 7, 2014, 11:36 PM UTC

FORTUNE — Blue Apron is closing in on a large new round of venture capital funding that could value the food-focused startup at upwards of $500 million, Fortune has learned.

The New York-based company designs meal kits, which feature three meals each, and sells them by weekly subscription. It makes a profit by buying food in bulk and splitting it up among many subscribers. That way there’s little spoilage, since pre-orders provide Blue Apron with a precise forecast of how much food to buy. As it has expanded geographically across the United States, Blue Apron also has expanded its offerings to take more dietary preferences, like kosher and pescetarian, into account.

Last month, the company told Fortune that it delivers 500,000 meals per month. At $10 per meal, that means Blue Apron is operating at around a $60 million revenue run rate.

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The company was founded 18 months ago by Matt Salzberg, a former venture capitalist at Bessemer Venture Partners. Blue Apron has raised $8 million in venture funding to date. The latest funding, closed in August 2013, was a $5 million Series B round led by Bessemer Venture Partners, First Round Capital and BoxGroup.

Since launch, several competing meal kit companies have entered the market. These include New York-based rival Plated, as well as HelloFresh, ChefDay, Munchery, Greeling, and Fresh Dish.

Some haven’t survived: PopUp Pantry, a Los Angeles-based meal kit company with 1,300 subscribers and $1.3 million million in funding, closed its doors after five months due to high delivery costs. At its current growth rate, and new war chest of venture funds, Blue Apron isn’t likely to suffer the same fate.

Sources say that the new Blue Apron round is designed to raise between $40 million and $50 million, although CEO Salzberg said: “The truth is that we have not done a financing, so there is nothing to report here.”