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Food delivery startup Wonder Group gets $100 million investment from Nestlé

Food delivery company Wonder Group received a cash injection from Nestleas the startup seeks to sell high-tech cooking equipment and prepared ingredients to businesses such as hotels, hospitals and sports arenas.

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

Nestlé and Wonder confirmed the deal but declined to reveal details of the transaction.

This funding could bring Wonder closer to its ambitions of making it easier, faster and cheaper for busy families to enjoy high-quality meals at home. The startup, which was valued at around $3.5 billion when it closed a $350 million funding round in June, was founded in 2018 by a serial entrepreneur and veteran Walmart e-commerce chief Marc Lore.

Wonder recently entered into an agreement to acquire meal kit company Blue apron for $103 million. It has also developed kitchen equipment that makes cooking restaurant-quality meals simpler and faster.

Before Wonder, Lore founded and sold e-commerce startup to Walmart for $3.3 billion in 2016. Walmart ultimately stop Jetbut Lore has overseen the big-box retailer’s aggressive push into the online world and its race to close the gap with its rival. Amazon. He I left Walmart almost three years ago.

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

In an interview with CNBC, Lore said working with Nestlé would help Wonder scale faster.

Marc Lore, former CEO of Walmart eCommerce

Scott Mlyn | CNBC

Nestlé, a food and beverage giant, makes ingredients, snacks and frozen meals sold in grocery stores, but also has a major catering business and sells to customers including college campuses and cruise lines . Some of those companies might also want Wonder kitchen equipment, Lore said.

The partnership will begin with Nestlé manufacturing pizzas and pastas suitable for Wonder’s kitchen equipment, as well as selling the kitchen equipment to customers.

Melissa Henshaw, president of outdoor advertising at Nestlé, said many Nestlé customers have struggled to keep up as customers seek convenient meals and bolder flavors, but companies lack the employees to prepare them. In many cases, this has led to changes that limit sales opportunities and disappoint customers, such as reduced room service menus in hotels, limited hours in cafes or tasteless, soggy or cold dishes.

“Through our partnership with Wonder, we have the opportunity to help operators across multiple out-of-home dining segments improve the quality of their food, provide consistency and truly open up additional revenue streams that have been quite put to the test after the pandemic. ” she says.

Wonder started with a very different business model: a fleet of trucks equipped with mobile kitchens that parked and prepared meals outside customers’ homes in suburban New Jersey and New York. The company ended that approach in January and laid off hundreds of employees in an effort to generate profits faster.

Instead, the startup has pivoted toward opening a growing network of physical kitchens where it can prepare menu items in kitchens that customers would otherwise find at well-followed restaurants or celebrity chefs, such as José Andrés, Bobby Flay and Michael Symon. She has purchased the rights to a growing number of these chefs and restaurants, allowing customers to mix and match: Diners could get entrees from four different restaurants for four different family members in one order.

The company currently has around 1,100 employees.

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 where customers can dine, but the majority of orders are delivered or picked up for a home meal, Lore said. Next year, he plans to open at least 20 more locations, he said.

With the startup’s new momentum, Wonder is selling its white-label technology and accompanying meal ingredients – specially designed and prepared – to other companies. The company has already deployed its business-to-business offering, called WonderWorks, across 50 locations, including convention centers, theaters and airports.

Ultimately, Lore said he wants Wonder to be a “super dining app” with a variety of tiered options that fit customers’ budgets, dietary preferences and schedules. Choices would include kits from Blue Apron and hot meals from its kitchens.

Wonder competes with a wide range of players in the food space. These are delivery companies such as Uber Eat and PorteDash to quick service restaurants, including SweetGreen And Chipotle and even grocers like Kroger And AmazonWhole Foods-owned Whole Foods, which has expanded its prepared food offerings.

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

“There’s no gas,” Lore said. “There’s no stove. There’s no fire. There’s no hood. There’s no grease trap. It could go to a shoe store, a studio yoga studio or at LensCrafters. It can go anywhere. So it allows you to be very, very adaptable with the kitchen.”

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