Wonder raises $650 million, eyes IPO next year

Wonder plans robots, drones and AI-generated menus

Wonder, the New York-based food company founded by billionaire Marc Lore, has raised $650 million in a Series D round at a $9 billion pre-money valuation. The company is planning a public market debut next year and is directing the new funding into technology as it automates cooking, delivery and menu creation.

Lore said the goal is to lower prices enough for Wonder’s food halls to compete with restaurant takeout and even grocery stores. “We think a lot more people would be ordering food at home if it were cheaper and more readily available,” he said in an interview.

Lore previously founded and sold Quidsi, an e-commerce site for diapers and other household goods, and Jet.com before leading Wonder. He founded Wonder in 2018 and became its CEO after serving as Walmart’s U.S. e-commerce chief until 2021. He sold Quidsi to Amazon in 2011 and Jet.com to Walmart for $3.3 billion.

Wonder initially recreated meals from popular restaurants through mobile kitchens operating out of a fleet of trucks, then shifted to opening physical locations, of which it has about 148, adding a couple a week. Delivery accounts for about 70% of the business, and the company has doubled down there with the acquisitions of food delivery platform GrubHub and meal kit company Blue Apron.

Lore said he was focused from the start on creating a platform that would deliver food faster, hotter and more accurately, and that recent advancements in technology have outpaced his expectations. “I don’t think we expected robotics and drones to be this far along this quickly,” he said. “We knew it was something in the future, but it happened faster than we anticipated.”

Wonder is installing robots in its kitchens alongside human workers. Last year, the company bought a robot technology from Sweetgreen that specializes in making bowl-based meals like salads and grain bowls. Lore said the robot can make about 500 bowls an hour and will go live at Wonder’s Midtown East location in a few weeks. The company has also been investing in a sauce-making machine and another focused on beverages. Lore said the beverage machine will go live next year.

Lore said he expects the robots to boost quality and accuracy, lower cross-contamination risks for people with allergies and improve sanitation while allowing for more complex meals. The main benefit, he said, is efficiency: with robots, each Wonder kitchen will produce three times as many orders with the same number of human workers. “The complexity and the amount of meals we can serve and the amount of restaurants we can serve goes up exponentially,” he said.

The added capacity feeds another initiative: Wonder Create, a program that will allow anyone to create their own restaurant, as Lore puts it. Users will design their own menu from an AI prompt and offer it at a Wonder location for $10 a month, earning a 10% commission on sales. More than a hundred influencers have already signed onto the program, which rolls out in November, and Lore called it the biggest catalyst for Wonder’s sales growth. It’s “going to change how people think about restaurants,” he said.

Automation is also extending to delivery. The company is teaming up with startup Zipline to deliver meals by drone, with the service rolling out in Texas in January. Lore said the approach is particularly well-suited to rural areas, where typical delivery can take longer and raise the risk of food arriving cold.

Wonder sees a particular opportunity in delivering oven-ready meals by drone. The company plans to use its existing infrastructure, locations and robotics to prepare those meals during off-peak hours, then send them out in the same deliveries as its hot, ready-to-go food. That should keep prices for “food for later” no more expensive than going to the grocery store, Lore said.

More broadly, Lore said the focus on automation should allow Wonder to lower prices across the board, which he argues are already more competitive than most delivery offerings. The push comes as Wonder plots an initial public offering for sometime next year; Lore declined to share expectations on the exact timing.