Food delivery startup Wonder Group receives $100 million investment from Nestle

Wonder Group has acquired rights to prepare dishes from popular restaurants and celebrity chefs such as Bobby Flay and José Andrés. Additionally, high-tech kitchen appliances have been developed to make cooking quicker and easier.

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Food delivery company Wonder Group has received a cash injection from Nestle as the startup looks to sell high-tech kitchen appliances and prepared ingredients to companies such as hotels, hospitals and sports arenas.

The deal includes a $100 million investment from Nestle as well as a strategic partnership, according to sources familiar with the matter who asked not to be named because the financial terms of the deal are not public.

Nestle and Wonder confirmed the deal but declined to disclose transaction details.

The funding could bring Wonder one step closer to its goal of making it easier, faster and more affordable for busy families to eat 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 a serial entrepreneur and former entrepreneur Walmart E-commerce boss Marc Lore.

Wonder recently closed a deal to acquire a meal kit company Blue apron for $103 million. In addition, kitchen appliances have been developed to simplify and speed up the preparation of restaurant-quality food.

Before Wonder, Lore founded e-commerce startup and sold it to Walmart in 2016 for $3.3 billion. Walmart eventually closed Jet, but Lore oversaw the major retailer’s aggressive push into the online world and its race to close the gap with rivals Amazon. He left Walmart almost three years ago.

Lore sold Quidsi, another company he co-founded and the parent company of, to Amazon.

Marc Lore, former CEO, Walmart eCommerce

Scott Mlyn | CNBC

In an interview with CNBC, Lore said that working with Nestlé will help Wonder grow faster.

Nestlé, a food and beverage giant, makes ingredients, snacks and frozen meals sold by grocery stores, but also has a large food services business and sells to customers such as college campuses and cruise ships. Some of these companies may also want Wonder kitchen appliances, Lore said.

The partnership begins with Nestle custom-making pizza and pasta for Wonders kitchen appliances and selling the kitchen appliances to customers.

Melissa Henshaw, president of out-of-home operations at Nestle, said many of Nestle’s customers were struggling to keep up as customers sought convenient meals and fancier flavors but companies lacked the employees to prepare them. In many cases, this has led to changes that limit sales opportunities and disappoint customers, such as: B. reduced room service menus in hotels, limited opening hours in cafes or tasteless, soggy or cold food.

“Through our partnership with Wonder, there is an opportunity to help operators in multiple takeaway segments improve the quality of their food, provide consistency and actually unlock some additional revenue streams that have been quite difficult post-pandemic.” She said.

Wonder started with a very different business model: a fleet of trucks with mobile kitchens that parked and prepared meals outside customers’ homes in the suburbs of New Jersey and New York. In January, it abandoned that approach and laid off hundreds of employees in order to turn a profit more quickly.

Instead, the startup focused on opening a growing network of brick-and-mortar kitchens where it can prepare dishes from a variety of cuisines that customers would otherwise find at restaurants with large followings or from celebrity chefs like José Andrés, Bobby Flay and Michael Symon. It has acquired rights from a growing number of companies These chefs and restaurants allow customers to mix and match – guests could receive entrees from four different restaurants for four different family members in a single order.

The company currently employs around 1,100 people.

By the end of the year, Wonder plans to have 10 locations in the tri-state area of ​​New York, New Jersey and Connecticut. Each of these locations has about a dozen seats for customers to dine in, but most orders are delivered or picked up for at-home dining, Lore said. At least 20 more locations are planned to open next year, he said.

With the startup’s new venture, Wonder sells its white label technology and associated food ingredients – specially manufactured and prepared – to other companies. The business-to-business offering, called WonderWorks, has already launched in 50 locations, including convention centers, theaters and airports.

Ultimately, Lore wants Wonder to be a “mealtime super app” with a variety of tiered options to fit customers’ budgets, dietary preferences and schedules. You can choose from kits from Blue Apron and hot meals from your own kitchens.

Wonder competes with a variety of players in the food space. They range from delivery companies like Above Eats and DoorDash to fast food restaurants included SweetGreen And Chipotle and even grocers like Kroger And Amazon-owned Whole Foods, which has expanded its offerings of ready meals.

Wonder wants to differentiate itself by the way it prepares these foods, so it can prepare a long list of meals and enhance the flavor of these menu items, even in a 2,800-square-foot kitchen with little equipment and labor.

“There’s no gas,” Lore said. “There is no stove. There is no fire. There are no extractor hoods. There are no grease separators. This could fit in a shoe store, a yoga studio or LensCrafters. It can go in anywhere. So you can be very, very adaptable with the kitchen.”

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