Food Delivery Startup Wonder Scraps Food Truck Strategy

Marc Lore,

Wonder’s majority owner and chief executive, said in an interview that the new strategy offers the company a faster path to profitability that requires less capital. Wonder needed to raise another $1 billion in about two years to expand its mobile kitchen truck fleet at the pace it hoped, said Mr. Lore. Now it plans to raise around $350 million in the same period, he said.  

“I see a much bigger opportunity to be more profitable, more capital efficient and slightly improve” the customer experience with physical kitchens compared with the food truck system, said Mr. Lore, an experienced entrepreneur and former

Walmart Inc.

e-commerce executive.  

The switch is a sign that even Mr. Lore, who has earned investors profits with past ventures such as Diapers.com and Jet.com, is running up against an investor market where funding is tightening and interest rates are rising. Startups face growing pressure to more quickly earn profits and use less capital compared with previous years. Many startups are laying off staff, delaying initial public offerings, and pivoting to new business models.

Wonder has laid off around 400 workers in recent months and currently has around 1,400 employees, a spokesman said. The company plans to lay off more people in the coming months, said Mr. Lore, but will end the year with more employees than it currently has as it opens physical locations. The Information reported in November that Wonder was laying off about 130 workers.

The company will wind down its fleet of trucks in the coming months and open around 10 physical locations in New York and New Jersey over the next year, said Mr. Lore. The model resembles a ghost kitchen, a network of kitchens that cook multiple cuisines from a single location for local delivery. Wonder’s version will offer some in-restaurant seating and food pickup, as well as delivery, and cook food from specific restaurants with which it has licensing deals. 

Unrestrained by the confines of a delivery truck, a physical location allows Wonder to sell from more restaurants at once, Mr. Lore said. The company can use its knowledge of cooking high quality food in small spaces to be a more efficient version of a high-end restaurant, he said. 

Fixed locations also allow Wonder to better control delivery times, reduce mistakes because more workers review each order and scale to other cities faster, he said.

Mr. Lore sold Quidsi Inc., an e-commerce site for diapers and other household goods, to Amazon.com Inc. in 2010 for $500 million. He sold Jet.com to Walmart for $3.3 billion in 2016. Walmart eventually wound down Jet, folding the operation into its broader e-commerce business. Mr. Lore left Walmart in early 2021 and took over as CEO of Wonder later that year.

Wonder has licensing deals to use the name and recipes of restaurants such as Bobby Flay Steak and Di Fara Pizza. It will continue cooking food from those restaurants in its physical locations, he said. It also aims to grow its business selling food kits and fast-cooking oven software to other businesses such as convention centers. 

Wonder will start phasing out trucks next week in some New Jersey neighborhoods, Mr. Lore said. That process will stretch through the spring. As the trucks disappear, the company hopes to open fixed locations that will serve existing customers in addition to new areas, he said.   

The shift may please some New Jersey residents who bristled at the sight of Wonder trucks idling in their tree-lined neighborhoods to cook and deliver meals, according to a Wall Street Journal article last summer.

Write to Sarah Nassauer at [email protected]

Marc Lore,

Wonder’s majority owner and chief executive, said in an interview that the new strategy offers the company a faster path to profitability that requires less capital. Wonder needed to raise another $1 billion in about two years to expand its mobile kitchen truck fleet at the pace it hoped, said Mr. Lore. Now it plans to raise around $350 million in the same period, he said.  

“I see a much bigger opportunity to be more profitable, more capital efficient and slightly improve” the customer experience with physical kitchens compared with the food truck system, said Mr. Lore, an experienced entrepreneur and former

Walmart Inc.

e-commerce executive.  

The switch is a sign that even Mr. Lore, who has earned investors profits with past ventures such as Diapers.com and Jet.com, is running up against an investor market where funding is tightening and interest rates are rising. Startups face growing pressure to more quickly earn profits and use less capital compared with previous years. Many startups are laying off staff, delaying initial public offerings, and pivoting to new business models.

Wonder has laid off around 400 workers in recent months and currently has around 1,400 employees, a spokesman said. The company plans to lay off more people in the coming months, said Mr. Lore, but will end the year with more employees than it currently has as it opens physical locations. The Information reported in November that Wonder was laying off about 130 workers.

The company will wind down its fleet of trucks in the coming months and open around 10 physical locations in New York and New Jersey over the next year, said Mr. Lore. The model resembles a ghost kitchen, a network of kitchens that cook multiple cuisines from a single location for local delivery. Wonder’s version will offer some in-restaurant seating and food pickup, as well as delivery, and cook food from specific restaurants with which it has licensing deals. 

Unrestrained by the confines of a delivery truck, a physical location allows Wonder to sell from more restaurants at once, Mr. Lore said. The company can use its knowledge of cooking high quality food in small spaces to be a more efficient version of a high-end restaurant, he said. 

Fixed locations also allow Wonder to better control delivery times, reduce mistakes because more workers review each order and scale to other cities faster, he said.

Mr. Lore sold Quidsi Inc., an e-commerce site for diapers and other household goods, to Amazon.com Inc. in 2010 for $500 million. He sold Jet.com to Walmart for $3.3 billion in 2016. Walmart eventually wound down Jet, folding the operation into its broader e-commerce business. Mr. Lore left Walmart in early 2021 and took over as CEO of Wonder later that year.

Wonder has licensing deals to use the name and recipes of restaurants such as Bobby Flay Steak and Di Fara Pizza. It will continue cooking food from those restaurants in its physical locations, he said. It also aims to grow its business selling food kits and fast-cooking oven software to other businesses such as convention centers. 

Wonder will start phasing out trucks next week in some New Jersey neighborhoods, Mr. Lore said. That process will stretch through the spring. As the trucks disappear, the company hopes to open fixed locations that will serve existing customers in addition to new areas, he said.   

The shift may please some New Jersey residents who bristled at the sight of Wonder trucks idling in their tree-lined neighborhoods to cook and deliver meals, according to a Wall Street Journal article last summer.

Write to Sarah Nassauer at [email protected]