Food-delivery company Wonder Group has gotten a money infusion from Nestle, because the startup looks to sell high-tech kitchen equipment and ready ingredients to businesses resembling hotels, hospitals and sports arenas.
The deal features a $100 million investment from Nestle, together with a strategic partnership, based on sources aware of the matter who asked to not be named because financial terms of the deal will not be public.
Nestle and Wonder confirmed the deal but declined to disclose transaction details.
The funding could get Wonder a step closer to its ambitions of constructing it easier, faster and cheaper for busy families to have high-quality meals at home. The startup, which was valued at about $3.5 billion when it closed a $350 million funding round in June, was founded in 2018 by serial entrepreneur and former Walmart e-commerce chief Marc Lore.
Wonder recently struck a deal to accumulate meal-kit company Blue Apron for $103 million. It has also developed kitchen equipment that simplifies and hastens cooking restaurant-quality food.
Prior to Wonder, Lore founded and sold e-commerce startup Jet.com to Walmart for $3.3 billion in 2016. Walmart ultimately shut down Jet, but Lore oversaw the big-box retailer’s aggressive push into the net world and its race to shut the gap with rival Amazon. He left Walmart nearly three years ago.
Lore sold Quidsi, one other business he co-founded and the parent company of Diapers.com, to Amazon.
In an interview with CNBC, Lore said working with Nestle will help Wonder scale more quickly.
Marc Lore, former CEO of Walmart eCommerce
Scott Mlyn | CNBC
Nestle, a food and beverage giant, makes ingredients, snacks and frozen meals carried by grocery stores, but additionally has a big food-service business and sells to clients including college campuses and cruise lines. A few of those firms might also want Wonder’s kitchen equipment, Lore said.
The partnership will start with Nestle making pizza and pasta tailored for Wonder’s kitchen equipment, together with selling the kitchen equipment to clients.
Melissa Henshaw, president of out-of-home for Nestle, said lots of Nestle’s clients have struggled to maintain up as customers seek convenient meals and bolder flavors, but the companies lack the workers to make them. In lots of cases, that is led to changes that limit sales opportunities and disappoint customers, resembling whittled-down room service menus at hotels, limited hours at cafes or food that is flavorless, soggy or cold.
“With our partnership with Wonder, there’s this chance to assist operators across multiple out-of-home segments have the opportunity to enhance their food quality, have consistency, and truly open up some additional revenue streams which have been pretty challenged post-pandemic,” she said.
Wonder began with a really different business model: A fleet of trucks with mobile kitchens that parked and cooked meals outside customers’ homes within the suburbs of Latest Jersey and Latest York. It pulled the plug on that approach in January and laid off lots of of employees in a push to show a profit quicker.
As a substitute, the startup pivoted to opening a growing network of brick-and-mortar kitchens where it may possibly make menu items across cuisines that customers would otherwise find at restaurants with large followings or celebrity chefs, resembling José Andrés, Bobby Flay and Michael Symon. It has bought rights from a growing variety of those chefs and restaurants, which allows customers to combine and match — diners could get entrees from 4 different restaurants for 4 different members of the family in a single order.
The corporate currently has about 1,100 employees.
As of the top of the yr, Wonder plans to have 10 locations within the tri-state area of Latest York, Latest Jersey and Connecticut. Each of those locations has a couple of dozen seats where customers can dine in, but the vast majority of orders are delivered or picked up for at-home dining, Lore said. Next yr, it plans to open at the very least 20 more locations, he said.
With the startup’s latest push, Wonder is selling its white-labeled technology and the meal ingredients — specially made and ready — that goes with it to other businesses. It’s already rolled out the business-to-business offering, called WonderWorks, at 50 locations, including convention centers, theaters and airports.
Ultimately, Lore said he wants Wonder to be a “super app for mealtime” with a wide range of tiered options that fit customers’ budgets, dietary preferences and schedules. The alternatives would come with kits from Blue Apron and hot meals from its kitchens.
Wonder competes with a various array of players within the food space. They vary from delivery firms resembling Uber Eats and DoorDash to quick-service restaurants including SweetGreen and Chipotle and even grocers resembling Kroger and Amazon-owned Whole Foods, which have expanded prepared food offerings.
Wonder wants to distinguish itself by the way it makes that food, so it may possibly prepare a lengthy list of meals and elevate the taste of those menu items, even in a 2,800-square-foot kitchen with little equipment and labor.
“There is not any gas,” Lore said. “There is not any stove. There is not any fire. There is not any hoods. There is not any grease traps. This will go right into a shoe store, a yoga studio or LensCrafters. It might go in anywhere. So it means that you can be very, very adaptable with the kitchen.”