Last January, former Walmart executive Marc Lore said Wonder gave itself less than a year to prove its model. Could it serve 30 restaurants from a single location with an under 30-minute average order-to-eat time? Achieve and maintain high customer satisfaction at a net promoter score of 60-plus? And could both things occur amid unit-level profitability?
On a social media post Tuesday, Lore said the company “resoundingly met and exceeded this challenge.”
In fact, it hit the metrics as it opened 10 locations from a cold start in 12 months. The first Wonder debuted on Manhattan’s Upper West Side and achieved those marks. There are now 11 in NYC, New Jersey, and Pennsylvania. Best described as food delivery startup, Wonder allows guests to order from the aforementioned 30 restaurants (all exclusively on Wonder), with meals promised within 30 minutes, all in one order. So there are north of 350 menu items to choose from “fast-fine” menus, with chefs such as Marcus Samuelsson and José Andrés, who both sit on Wonder’s board.
“We are clearly on our way to building the super app for mealtime and fulfilling our mission of making great food more accessible,” he said.
All noted, Lore believes it’s time to scale. The company announced Tuesday it’s raised $700 million in capital, with participation from its major existing shareholders, led by NEA, GV, Accel, Bain Capital Ventures, Forerunner, Alpine, and Harmony, as well as further investment from Watar Partners. Lore himself tacked on $100 million. Dragoneer, Jefferies, Red & Blue Ventures, CAZ Investments, Kuvare Insurance, and Fubon Ventures joined as new investors. Amex Ventures (an existing investor) and Nestlé (a previously announced commitment) also pooled in as strategic investors.
Within the past year, Wonder has hired leadership, acquired meal kit pioneer Blue Apron, and partnered with Walmart to open its first storefront in Quakertown, Pennsylvania (the smallest model of the fleet), with plans for two more this year in Teterboro and Ledgewood, New Jersey.
“With our vision, capital, and people plan locked in, our focus is now fully on execution as we scale Wonder,” Lore said.
Specifically, the company plans to deploy funds toward driving expansion, research and development, and unit economics.
It will begin by accelerating physical retail stores. The goal being to widen its current base of 11 locations to 35 by the end of 2024 and 90 by year-end 2025. That growth will balloon throughout the Northeast.
Next, Lore said, Wonder will continue pushing culinary innovation by “aggressively investing” in R&D,” everything from faster cook times to software enhancements to new menu items, chefs, and “iconic restaurant partnerships.”
“Customers love features like multi-restaurant ordering and we’ll have many exciting new products and partnerships to talk about soon,” Lore said.
Lastly, Wonder 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.
“We’ve learned so much over the past year, and this round of capital is a show of confidence in what our team is creating: the super app of mealtime,” Lore said.
This past April, Lore told Inc. it 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.
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.”
“It’s an elevated delivery experience of really high-quality food. And you get the ability to order from multiple restaurants [at a time],” Inc. reported. So that’s the key value proposition, and that’s the reason people are coming back so frequently.” Lore added Wonder orders average 9.6 out of 10 for “taste score” and the NPS, as noted, is in the 60s.
A Wonder spokesperson told Inc. all company locations were profitable. 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.
It currently boasts five different size models for the brick-and-mortar. And units flex to demographics, too. The Walmart stores, in one example, offer lower-priced offerings such as fried chicken and pizza.
Additionally, Lore told Inc. Wonder was targeting an IPO within the next three to five years and likely wouldn’t leave the Northeast it it’s publicly traded.
