Wonder is preparing for a potential IPO as the food technology company accelerates its expansion across the US, including plans to open at least 100 locations in Texas by the end of 2027.
Founded by serial entrepreneur Marc Lore in 2018, the business has raised $3.3 billion from investors including DoorDash, Alphabet’s venture arm and Gwyneth Paltrow. Its latest funding round valued Wonder at $9 billion before the new investment.
Lore said a public listing would provide the capital needed to build the company and create a public currency for further acquisitions, although he declined to give a timetable.
“[The mission] is really why I want to go public and raise the capital that it’ll take to build that kind of generational business, also to have a public currency to be able to do more M&A,” he said.
Wonder operates food-hall-style sites where customers can order meals from more than two dozen restaurant concepts through its own app or third-party platforms. The company also owns Grubhub, allowing customers ordering through Wonder’s app to avoid delivery fees, while menu prices do not include commission costs charged by delivery platforms.
It has opened 170 shops across the north-east and mid-Atlantic regions over the past three years. Texas will be its next major market, with the company planning to enter the state next year and build at least 100 sites by the end of 2027.
Wonder bets on automation and new restaurant concepts
The company prepares food in central kitchens before sending it to individual sites, where staff cook and finish the meals. Its electric storefronts do not require gas or ventilation, which Wonder says allows it to move into premises more quickly and reduce renovation requirements.
Wonder is also automating parts of the kitchen operation, including the assembly of salads and bowls, with sauces and drinks expected to follow. Lore said the company’s long-term ambition was for food preparation and delivery to be fully autonomous by 2040.
From November 17, influencers, entrepreneurs and brands will be able to pay $10 a month to create their own restaurant concept through Wonder Create. The platform will use artificial intelligence to help develop names, logos, prices and recipes, while users receive a share of revenue from orders.
Lore said the service was intended to make restaurant ownership possible without the capital, overheads or responsibility for running a kitchen. It is expected eventually to be opened to the public, with menus drawn from Wonder’s available ingredients.
Wonder has spent more than $1 billion on acquisitions, including Grubhub, logistics company Relay, meal-kit provider Blue Apron and several restaurant brands. Celebrity chefs such as Bobby Flay, Michael Symon and Marcus Samuelsson have received upfront payments and equity in return for allowing the company to use their names on selected concepts.
Lore, whose previous businesses include Diapers.com and Jet.com, has used his record in e-commerce to attract backing for Wonder. Alphabet venture capital executive Dave Munichiello said he invested in companies led by Lore because of his confidence in the entrepreneur’s ability to build businesses.
“I joke around at GV that I do enterprise software investing, AI investing and anything that Marc Lore is running as an active CEO,” Mr Munichiello said.
The challenge of winning over diners
Wonder’s expansion comes as consumers have become more selective about eating out and have cut back from the peak in delivery orders seen during the Covid pandemic. High delivery fees and inflated menu prices remain a challenge for the sector.
The company has also faced criticism on social media over the quality and price of its food. Lore said Wonder collected thousands of customer reviews each day covering taste, temperature and portion size, and that scores had improved over the past year.
Despite mixed online reactions, transaction data from Indagari showed Wonder with a higher weighted average retention rate and customer lifetime value than Cava and Sweetgreen. The company has also built a presence in New York, one of the most competitive restaurant markets in the US.
Wonder has been operating at a financial loss since acquiring Blue Apron and Grubhub, according to a previous report cited in the source material. It plans to reduce meal prices through greater automation and drone delivery, although establishing that infrastructure will require significant investment.
Gabrielle Scheibe Rabinovitch, previously an executive at payments processor Worldpay, joined Wonder as chief financial officer in March as the company prepared for a possible listing. Lore has previously said the business would be ready to go public early next year, but has not confirmed when an IPO roadshow might begin.
