Wonder Eyes Texas, Automation and a Possible IPO

Wonder, the food-hall-style startup founded by serial entrepreneur Marc Lore, is preparing its next chapter. Less than a decade after launching in 2018, the company is weighing a public offering, planning its first move into Texas and betting that automation and a subscription program for user-built “restaurants” can scale a business that has already drawn billions in capital.

According to a CNBC report published Sunday, Wonder has raised $3.3 billion to date from backers including DoorDash, Alphabet’s venture arm and Gwyneth Paltrow. A Series D round earlier this year lifted its pre-money valuation to $9 billion, CNBC reported, just under what Subway fetched in its sale two years ago.

Lore told CNBC the company is “a vertically integrated food technology platform to make great food more accessible.” Diners can order takeout or delivery from Wonder’s locations through its own app or third-party platforms. Wonder owns Grubhub, so customers ordering through its app pay no delivery fees, and menu prices are not padded to cover commissions, the report said. The company is also automating parts of its kitchens, including salads and bowls, with sauces and beverages next. Lore said Wonder aims for fully autonomous food preparation and delivery by 2040.

On a possible IPO, Lore was careful. The listing would give Wonder capital to build what he called a “generational business,” plus “a public currency to be able to do more M&A.” He added: “But I can’t talk about timing.” CNBC noted that any road show assumes the window for companies across industries to go public reopens in the coming months.

The acquisition pace has been heavy. Wonder has spent more than $1 billion on deals, not counting those with undisclosed terms. Its purchases include Grubhub, logistics provider Relay, meal-kit company Blue Apron and several buzzy New York restaurant concepts. More recent additions include Blue Ribbon Fried Chicken and Salt Hank’s.

The physical footprint is growing quickly. About 170 Wonder storefronts have opened from Virginia to Massachusetts over the past three years. Next year, the company plans to enter Texas for the first time, targeting at least 100 locations there by the end of 2027. Lore sees a large market in exurban and rural areas where dining options often stop at fast food and gas stations.

The operating model is built for speed. Food is prepared at commissary kitchens and trucked to each location, where employees unseal, cook and finish items. Storefronts are all electric, with no gas or venting, which lets Wonder move into a space quickly and limit renovations and red tape. Menus draw on more than two dozen “restaurants,” among them Dabba Indian Kitchen, Tejas Barbecue and Pop Salad. Chefs including Bobby Flay, Michael Symon and Marcus Samuelsson receive up-front payments and equity for licensing their names.

The ghost kitchen comparison looms. Delivery-only players such as Kitchen United have sought bankruptcy protection and wound down. Lore rejected the label, pointing to the dine-in front of house at Wonder locations and its vertical integration.

Investors are backing the founder as much as the format. Lore built the parent of Diapers.com, sold to Amazon for $545 million in 2010, then sold Jet.com to Walmart for about $3 billion six years later. Dave Munichiello, managing partner at GV, said he jokes that he invests in enterprise software, AI “and anything that Marc Lore is running as an active CEO.”

Lore, who is also trimming his stake in the Minnesota Timberwolves to focus on Wonder, summed up his pitch simply: “Everybody eats. It’s defensible from AI.”