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The Wall Street Journal this morning reports that Wonder Group, a food delivery startup led by Marc Lore, has just completed a new $350 million funding round that values the company at about $3.5 billion at a time when it is planning its expansion beyond the cluster of New Jersey suburbs - totaling 132,000 households -  it currently serves.

Lore tells the Journal that had the completed this funding round six months ago, when the economy was cooking, it would have been valued at a much higher number.

The Journal writes that "the investment and valuation come at a time when funding for startups is drying up, a swift reversal from recent years when tech enthusiasm, low interest rates and other factors helped nudge investors further into betting on companies without near-term plans to earn a profit."  Lore says that the current funding and valuation gives Wonder plenty of runway to grow.

Lore has described Wonder this way:

"Wonder is an exciting new approach to in-home dining that combines the convenience of delivery with the quality of the best dine-in restaurants. It has a real opportunity not only to completely change how people eat, but also to create a better future by giving them access to the world’s best food — with nutritious options — in a convenient, affordable, and sustainable way … Our innovative, vertically-integrated approach begins with exclusive menus from the country’s best chefs and restaurants. A central commissary sources high-quality, fresh ingredients and serves as the start of each meal’s journey. Orders are then fired, finished, and plated in our mobile kitchens just steps away from your door, and served as soon as they’re ready — allowing you to experience the food the way it’s meant to be enjoyed."

The Journal writes that "Wonder aims to expand to a second part of New Jersey later this year, then eventually to regions across the U.S. by 2035."

And, the Journal writes:

"Food-delivery and meal-kit businesses have been able to attract more customers through the Covid-19 pandemic but have faced sharper pressure on their bottom lines as a result of higher operating costs, including payments to restaurant partners, staff and drivers. Investors are worried about the fate of pandemic-fueled businesses: Uber Technologies Inc. shares are down more than 48% this year, and Blue Apron Holdings Inc. shares are down more than 64%."

The Journal notes that "So far at Wonder, hundreds of millions of dollars has been spent figuring out how to re-engineer high-quality restaurant meals such as seared steak in a small kitchen with limited gear, as well as how to speed up cooking.

"Having made progress on the recipes, executives said they have turned their attention to speeding up the cooking process in a bid to make the venture profitable. Wonder has taken steps such as redesigning the kitchen layout and using software that helps chefs identify the most efficient way to prepare a meal."

Lore is a serial entrepreneur.  In the early part of the century, he was the cofounder and CEO of Quidsi, which included;  he sold that company to Amazon for about $500 million in 2010 and then ran the division for two years.  Then, he was founder and CEO of, which he sold to Walmart for $3.3 billion in 2016, where he ran the company's US e-commerce operations for more than four years.

KC's View:

I'm going to be really interested to see how Wonder expands and scales up.  I don't completely understand the economics of the business model - it sounds like offering personal chefs to people, and I'm not sure how big an audience there will be for this.  But Lore is nothing if not resourceful and inventive, and for the moment, at least, the most important part of the economics is the raising of funds.