The Information reports that "Wonder, a mobile kitchen and food-delivery startup led by Jet.com founder Marc Lore, has laid off 7% of its workforce, a company spokesperson said, as it attempts to overhaul its business … It’s a dramatic stumble for Wonder, which had been riding high on Lore’s previous e-commerce successes and the tail end of the pandemic-era surge in investor interest in food delivery."
Lore built his reputation on starting Quidsi.com (parent company to Diapers.com), which he sold to Amazon in 2011 for $545 million, and Jet.com, which he sold to Walmart in 2016 for $3.3 billion.
The Information puts the situation in context:
"Wonder, which has pitched its meals as a fresher, upmarket alternative to what’s available on delivery apps like DoorDash, has built its business around vans staffed with employees who drive to customers’ homes and prepare meals in their driveways, based on recipes from celebrity chefs like Bobby Flay and Nancy Silverton … Wonder exited stealth mode in 2021 and swelled to more than 2,000 employees by this summer, according to the company. Wonder’s expansion included opening a 47,000-square-foot facility in Lawton, Mich., devoted to retrofitting vans by installing ovens and industrial kitchen gear, according to public records and job listings."
The story notes that Wonder "landed a $3.5 billion valuation when it raised $350 million this summer and planned to add more than a thousand kitchens around the tri-state area this year. But now it’s changing up how it’s selling food and trying to find other companies to buy the custom vans it’s been building. The company currently has a headcount of 1,900, a Wonder spokesperson told The Information, meaning the layoffs affected about 130 employees."
And, the story says:
• "Wonder has been slow to execute on Lore’s vision. It currently has less than 500 mobile kitchens on the road, according to the company. Wonder started operating in New Jersey’s Bergen County in September and New York’s Westchester County in October, but it is still not available in Connecticut, New York City or most of New Jersey. Wonder is currently available to 450,000 households in about 75 towns in the tri-state area, the Wonder spokesperson said. The company expects to start operating in New York City in late January or early February of 2023, the spokesperson added."
• "A Wonder spokesperson said the company now expects revenue to increase 20 times between 2021 and 2023, which would come out to $100 million in revenue in 2023. That would be a decline of more than a third from the 2023 projections Wonder shared with potential investors in June."
• "Wonder has been pitching other companies on buying its mobile kitchens as well as equipment like ovens. The startup has also been trying to branch out by selling meal kits to establishments like bars and sports arenas, according to a former employee. The buyers would then do the final preparation of the meals, as opposed to Wonder fully preparing them itself."
- KC's View:
Just like everyone else in the technology, e-commerce and e-grocery spaces, Lore's startup accelerated during the pandemic and then slammed into inflation and a recessionary mindset. I'm not sure that expanding into the meal kit business is the option with the greatest potential, but it may be that the options are, in fact, limited at the moment. (Also not good that they're trying to offload some trucks…)
Maybe instead of thinking so grandly, Lore should've screened Chef before launching his business - it is all about bringing a chef's mentality to the food truck business.