Capitol Group

Capital World Investors sold all of its shares in Blue Apron stock this past Friday, according to a report by Bloomberg News.

This withdrawal of support sends a signal to other investors that Blue Apron’s second most important investor has lost confidence in the meal delivery kit startup company. Blue Apron went public of June this year, and has since struggled to gain momentum, its stock price falling below expectations.

Another complication for Blue Apron was the entry of Amazon into the market. Amazon announced its acquisition of Whole Foods shortly before Blue Apron went public, and the online retail giant also began offering its own meal kits directly from the site. Analysts have speculated that Amazon seems to be positioning itself to compete directly with independent meal kit service companies, causing investors to shy away from Blue Apron who has struggled to make a profit despite its growth.

Part of Blue Apron’s growth strategy has been investing heavily in marketing. The company has widened its offerings to include wine pairings and individual meal kit deliveries in order to compete. Sales have grown as has revenue, but the growth has been outpaced by spending on marketing.

Blue Apron has since announced a hiring freeze and cut back its marketing budget to ease the minds of remaining investors and try to salvage its stock. It moved its fulfillment center to a new building in New Jersey, which has resulted in some erroneous orders being sent to customers, which has cast a shadow on its operations.

Capital World Investors, a division of Capital Group, initially had a 12.9 percent stake in Blue Apron (as of June 30), which had made it the company’s second largest investor, according to Bloomberg. Since going public, Blue Apron’s shares have fallen 45%.

Earlier this month, Blue Apron seemed to recover. It had a boost to its stock price when it announced new subscription options for customers. Previously, the company offered weekly subscriptions for 3 meals per week, but now customers can pay for 2 or 3 meals per week and cancel anytime.

Investors were also interested in Blue Apron because of rumors that big grocery companies were interested in moving into the space. Albertsons Companies (who owns Safeway) was rumored to be in talks with meal kit service Plated, according to market website The Information. This followed Campbell’s Soup’s partnership with Plated as well.

Blue Apron could not be reached by Bloomberg for comment.