Wonder Group, a Cranford-based startup known for its network of van-based kitchens that cook up meals designed by celebrity chefs such as Bobby Flay and Michael Symon outside of customers’ homes, is rethinking its business strategy.
As part of a shift to a more conventional and less expensive model, the venture, which was launched four years ago by Jet.com founder Marc Lore and former Walmart executive Scott Hilton, plans on “reducing” its fleet of several hundred Mercedes Sprinter utility vans and replacing them with physical locations that offer delivery, pick-up and some dine-in options from the specific restaurants that Wonder has licensing deals with.
In a Jan. 10 LinkedIn post titled “Our ‘Fast-Fine’ Future at Wonder,” Lore did not divulge how many employees would be affected, but said the “tough personnel choices” regarding its mobile chefs was “by far the most difficult part of this strategic decision.”
While a spokesperson for Wonder did not confirm when it will begin winding down mobile operations, Bloomberg reported the process will start sometime next week and conclude by late May.
The startup, which was valued at about $3.5 billion last year, has raised almost $900 million in debt and equity financing from investors, including $350 million in series B funding in June 2022.
After a pilot period last year in Westfield, Wonder grew to serve more than 70 towns across New Jersey as well as a handful in Westchester County, N.Y. The company employs more than 1,300 workers.
Wonder had sought to raise as much as $1 billion over the next two years as part of an expansion of its food truck business across the Northeast before rolling the service out nationwide in addition to hiring an additional 500 employees.
However, according to both Bloomberg and The Wall Street Journal, following the strategy shift, Wonder now plans to raise $350 million over that period and has already cut 400 jobs in recent months.
“As an entrepreneur, I’ve learned that keeping an open-mind and relentlessly challenging your assumptions is one of the most powerful tools to have at your disposal. You have to be willing to learn, everyday – analyzing past performances, listening to new signals and adjusting quickly to that new information,” Lore wrote.
“I knew there would be new opportunities to pursue, but also tough choices to make. Our mobile restaurant business has taught us enormously valuable insights, which now, has uncovered an even bigger opportunity for us to scale in a more capital-efficient way,” he said.
According to Lore, Wonder expects to open its first physical location next month on the Upper West Side of Manhattan, enabling the company to begin serving New York City customers for the first time. After that, Wonder aims to start operating up to 10 locations throughout its current service areas in Union, Essex and Bergen counties in New Jersey and Westchester County in New York.
The physical locations, he said, will give Wonder “the ability to offer dozens of different cuisines through a single kitchen, utilizing the same technology from our mobile restaurants, all while making our great food even better, faster and hotter, delivered right to your door.”
“As opposed to a ghost kitchen, our Wonder locations are all vertically-integrated, meaning we control every aspect of the process – from the front-end app and sourcing of food, to the cooking, delivery and every step in between. This high level of integration is what enables us to be hyper-precise with our cook times, timing pick-ups and deliveries down to the exact moment orders are ready, elevating the at-home dining experience in the exact same way our mobile restaurants did,” Lore explained.
“It’s no easy feat executing this type of operational shift, especially when the current strategy and original concept is working, achieving revenue per vehicle beyond what we had projected years ago. But through our pilot program of this new concept, we couldn’t ignore the even faster order-to-eat times, higher NPS [Net Promoter Score] scores and cost-savings (through less overhead and infrastructure),” Lore wrote.e