Marc Lore Wonder expands, mulls IPO

Less than a decade after its founding, food startup Wonder has seen its footprint and value grow.

However, the company has more ambitious plans, such as a subscription program to allow diners to open their own “restaurants”, an aggressive expansion in Texas and a potential initial public offering.

Created by serial entrepreneur Marc Lore in 2018, Wonder advertises itself as “the best restaurants from around the country, all in one place.” Diners can place takeout or delivery orders from food hall-style locations on Wonder-branded apps or third-party platforms, including Grubhub, which Wonder now owns.

As Lore explained to CNBC, “Wonder is a vertically integrated food technology platform to make great food more accessible.”

To achieve its goals, Wonder plans to open locations in cities, suburbs and rural areas nationwide and aims to keep prices lower than the cost of delivered groceries. Thanks to Grubhub’s ownership, Wonder customers who order through the startup’s app don’t have to pay delivery fees, and the menu prices don’t increase to cover commission fees to the delivery platform. In addition, Wonder automates several kitchen functions, such as assembling salads and bowls and sauces and drinks.

The company aims to prepare and deliver food autonomously by 2040, Lore said.

Now, Wonder has to convince the visitors of the platform built on cost savings and options make it worth while in the competition. industry.

Lore’s vision for Wonder has helped the company raise $3.3 billion to date, from investors like DoorDash, Alphabet‘s venture arm and Gwyneth Paltrow. A Series D fundraising round earlier this year raised its pre-money valuation to $9 billion — just under the price the Subway sandwich chain sold for two years ago.

Wonder’s next pitch for investors can be in the IPO road show, assuming that windows for companies across the industry to reopen publicly in the coming months.

“[The mission] I really want to go public and raise capital that will take to build that kind of business generation, also have a common currency to be able to do more M & A,” Lore said. “But I can’t talk about time.”

Lore’s expertise lies in e-commerce, not restaurants.

He helped found the parent company Diapers.com and sold it in 2010 to Amazon for $545 million. Just six years later, Walmart paid about $3 billion for its follow-up venture, Jet.com. Lore is staying at the retailer until 2021 to accelerate Walmart’s e-commerce growth.

Basketball fans may also recognize Lore as the owner of the Minnesota Timberwolves. In 2021, he and baseball legend Alex Rodriguez agreed to buy the team for $1.5 billion, although the deal was not completed until 2025. Lore recently made a deal to reduce his investment in minority shares “to focus on his business,” Rodriguez said in a statement in August, referring to Wonder.

Lore’s latest startup started with the idea of ​​bringing food delivery to consumers’ homes via a sprinter van equipped with a mobile kitchen. The truck lasted about two years before Wonder ditched them in favor of a brick-and-mortar location, which could offer food options and lower costs.

Lore’s track record of success has helped him win investors for Wonder.

“I joke at GV that I do enterprise software investments, AI investments and whatever Marc Lore does as an active CEO,” said Dave Munichiello, GV’s managing partner at Alphabet venture capital, who has known Lore since his Diapers.com days and invested in Jet.com through GV.

Lore himself thinks that his vision is the reason for Wonder’s billion dollar funding.

“Eat everything,” he said. “This is defensible from AI.”

Wonder has spent more than $1 billion on acquisitions, not including deals where financial details were not disclosed. It bought Grubhub, delivery and logistics provider Relay, meal-kit provider Blue Apron and high-priced New York restaurant concepts.

But Lore said he sees a “total addressable market” for Wonder if it can sell high-quality food at accessible prices, especially in exurban and rural areas with few dining options beyond fast food and gas stations.

From Virginia to Massachusetts, 170 Wonder storefronts have appeared over the past three years. Next year, the company plans to enter Texas for the first time — with a goal of at least 100 locations in the state by the end of 2027.

Wonder prepares the food in the commissary’s kitchen, then transports it to each location, where employees open, cook and finish the menu items. Storefronts are all electric, without gas or venting, so Wonder can quickly move to a new place and cut down on renovations and red tape.

The location serves menu items from more than two dozen “restaurants,” including Dabba Indian Kitchen, Tejas Barbecue and Pop Salad. Celebrity chefs including Bobby Flay, Michael Symon and Marcus Samuelsson received upfront payments and equity in Wonder so the company could use the name for some of its concepts. More recent additions include acquisitions such as Blue Ribbon Fried Chicken and Salt Hank’s, brands with established followings.

With so many options under one roof, Wonder has been compared to a ghost kitchen, a bustling startup without a dine-in. chairs on fire as food delivery orders drop following the Covid pandemic. Once considered a potential nuisance to the restaurant industry, ghost kitchen companies such as Kitchen United filed for bankruptcy protection and wound up their operations.

Lore disagrees with the comparison.

“You can see there in front of the house [in the] brick and mortar,” he said. “You will see people at lunchtime, sitting there enjoying lunch, so it’s not ghost-y in that way. But I also think that we are vertically integrated.

Wonder has once marketed itself as a ghost kitchen, instead of calling itself “a new type of food hall” or “modern food” before landing on a “vertically integrated food technology platform.”

Starting November 17, the company plans to take the next step with Wonder Create. Influencers, entrepreneurs and brands can pay $10 a month to start their own “restaurant” based on Wonder’s location and get a share of the revenue from orders. Artificial intelligence will help with branding, including names, logos, prices and recipes.

“It can be a restaurant for you and your friends, or you can be an influencer with a following,” Lore said.

He wanted to Wonder Create to democratize restaurant ownership – minus the capital, overhead costs or oversight of kitchen operations. The platform will eventually be available to the public, with users deciding on menu items based on Wonder’s pantry.

In addition to Wonder Create, the company is also using AI for other initiatives. MEL, a proprietary AI platform, can use customer health information, such as data from Oura rings or Whoop trackers or even blood biomarkers, to prepare breakfast, lunch and dinner for users.

MEL isn’t currently available to Wonder customers, although Lore uses AI to suggest its own meals, like the chicken muffins she ate for breakfast on a Tuesday in October.

While Wonder has won over venture capitalists, the battle for stomachs and wallets is tougher.

Budget-conscious consumers are eating out less often and are becoming more selective when they do. And while food delivery is still more popular than before the pandemic, consumers have cut back on delivery orders compared to the peak of the Covid era. Fees and high menu prices, which offset the restaurant’s commission fee with the app, make delivery more expensive than dining in.

In addition, some consumers are skeptical about Wonder more specifically. Posts on social media deny the quality of the company’s food and funding from venture capital.

“Okay, but just average,” said Amir Ings, a 27-year-old in Philadelphia, on TikTok reviewing an order of three tacos from Wonder at the end of 2025. “My expectations are in the gutter – not as bad as I thought, but still not good. And I paid no more than $16 for this.”

Lore told CNBC that Wonder receives thousands of reviews per day from customers, rating the taste, temperature and portion size of the order on a scale from 1 to 10. Wonder starts the Board meetings by talking about the taste score, Munichiello said.

“We’re maniacally focused on the quality of food…. We’re constantly iterating on meals that score lower, and looking over time, the last 12 months, we feel the score has improved, our Google reviews have improved,” Lore said. “I expect the quality of the food to improve as we scale, which doesn’t always happen.”

Despite lackluster reviews on social media, Wonder has fans. Based on transaction data from Indagari, Wonder has a higher weighted average retention rate – how likely the restaurant is to return – and a higher lifetime value – how many customers have spent time – than Cava and Sweetgreen.

In addition, Wonder has been successful with its location in the most competitive market for restaurants in the country.

“He made this company work well in the hardest place in the country to stand this model: New York,” Munichiello said. “You have a lot of options in New York.”

Ultimately, Wonder wants to win over the rest of the US – and public market investors.

In March, the company hired Gabrielle Scheibe Rabinovitch, previously at payment processor Worldpay, as chief financial officer as it prepares to go public.

Lore declined to comment on the timing of a potential IPO to CNBC, though he previously told Fortune that the company would be “ready and willing to go public early next year.”

Since buying Blue Apron and Grubhub, Wonder has been operating at a financial loss, Information previously reported. The plan is to reduce food prices by using automation and drone delivery. In the long run, these plans can reduce costs, although building the foundation won’t be cheap.

In recent years, investors have grown less tolerant of startups that pursue growth at all costs, according to Avery Marquez, director of investment strategy at Renaissance Capital. To sway investors, unprofitable companies must show that they are taking steps toward profitability — or that growth will continue long after the IPO.