Food hall startup Wonder, which just four months ago completed a $650 million deal for Grubhub, has raised another $600 million in funding, according to Bloomberg. This latest round for CEO Marc Lore’s company lifts it to a valuation north of $7 billion.
Lore in a LinkedIn post Tuesday said there was participation from major existing shareholders, led by New Enterprise Associates, Accel, Google Ventures, Forerunner, as well as further investment from strategic investors, including Amex Ventures.
Lore, a former Walmart executive, said Wonder would use the latest raise “to continue accelerating the expansion of our physical retail locations.” That includes opening one a week with plans to expand from its current base of 46 to more than 90 by the end of 2025. “We’re excited to bring Wonder to more comm unities throughout the Northeast and are focusing on our expansion into Philadelphia and D.C.,” he said.
Wonder in March 2024 raised $700 million in capital, including $100 million tacked on by Lore himself. At that time, there were 11 units in New York City, New Jersey, and Pennsylvania. Lore, the previous January, said Wonder gave itself less than a year to prove out its model—a premise that aims to serve 30 restaurants from a single location with an under 30-minute average order-to-eat time. And could it do so with high guest satisfaction at a net promoter score of 60-plus while maintaining unit-level profitability?
Ahead of the $700 million raise, Lore wrote the company, which also owns Blue Apron and media entity Tastemade, “resoundingly met and exceeded this challenge.”
And it’s been expanding rapidly since, rising from those 11 stores to the 46 it now plans to double. It also partnered with Walmart and opened a storefront in Quakertown, Pennsylvania, with plans for more.
Best described as a food delivery startup (or food hall), Wonder allows customers to order from the aforementioned 30 restaurants—all exclusively on Wonder—with meals promised within the half hour, all on one ticket. So it’s a lineup of 350-plus menu items from “fine-fast” menus, with chefs such as Marcus Samuelsson and José Andrés, who both sit on Wonder’s board. Cuisine also includes options from Nancy Silverton, Bobby Flay, and more. Diners can order takeout, delivery, or show up for dine-in, depending if it’s a storefront.
In Tuesday’s Bloomberg article, Lore said he would like to take Wonder public at some point. He doesn’t have plans to sell the company. Lore dealt an earlier startup, Jet.com, to Walmart Inc. in 2016 for more than $3 billion.
Lore described the vision as a “super app for mealtime,” based around delivering convenience to customers willing to pay for it, and noted Wonder has more than $2 billion in revenue, inclusive of Grubhub.
Wonder, beyond growth, plans to invest in R&D, everything from faster cook times to software enhancements to new menu items, chefs, and “iconic restaurant partnerships.”
It also expects to deepen investments in proprietary tech to fuel operational efficiencies across a vertically integrated system. Things like back-end systems to lower food waste, next-gen kitchen designs to boost throughput and consistency, and an enhanced delivery network that ensures couriers and customers don’t have to wait longer than promised.
The April before it raised $700 million, Lore told Inc. Wonder had enough cash to last until the end of 2024 and expected to raise another $200 million either by the end of 2023 or early 2024. But early success and a major shift in late 2022 spurred larger aspirations. (The funding part has not proven to be an issue, clearly).
That change included cutting its fleet of high-tech food trucks to focus instead on a brick-and-mortar. The 30-minute window defines from order to delivery. Wonder holds a tight radius where, in New York City, he’s said the actual delivery time is “no more than six minutes.”
Wonder generates a percentage of revenue relative to locations’ rent.
As Lore shared, Wonder can put 30 restaurants in a single 2,800-square-foot kitchen, “which generates much higher revenue per square foot than a typical restaurant.”
So the rent is lower as a percentage of revenue, as is labor. A hyper-local delivery parameter also enables it to execute more deliveries per hour than standard restaurant operations.
According to Inc., Wonder has also started selling ovens and food white label to business clients, which could ultimately include stadiums, arenas, hospitals, and hotels.
