Wonder Group Secures $100 Million Nestle Investment and Plans Blue Apron Acquisition

This is an English adaptation of a FoodBud historical article originally published on November 28, 2023.

FoodBud reported, citing media coverage, that meal-delivery company Wonder Group received a $100 million investment from Nestle and entered into a strategic partnership with the company. Nestle and Wonder confirmed the transaction but declined to disclose deal details.

Funding and valuation context

New York-based Wonder Group completed a $350 million Series B financing round in June 2022, equivalent to about RMB 2.3 billion. According to The Wall Street Journal, the company was valued at $3.5 billion, or about RMB 23.4 billion, at that time.

After that round, Wonder Group’s total debt and equity financing reached $900 million. Including Nestle’s $100 million investment, total financing would reach $1 billion.

From mobile kitchens to physical stores

Wonder Group’s original model was built around a network of mobile food trucks or vans. The company partnered with well-known chefs to build a broad menu, then cooked meals inside the vehicle and delivered them to customers’ homes.

Founder Marc Lore previously founded e-commerce platform Jet.com, which he sold to Walmart in 2016 for $3 billion in cash. Lore left Walmart in January 2021 and announced later that year that he would become CEO of Wonder Group.

The idea for Wonder Group came from Lore’s own experience living alone. Without someone at home to cook, he often needed to order food. He contrasted that with the period when he lived with his former wife and children, when meals were often cooked at home. His concept was to make high-quality, home-style prepared meals available to households.

Lore argued that meals ordered through delivery platforms often arrive cold and do not always offer high-quality food. Wonder Group’s solution was to prepare ingredients in advance in central kitchens, then dispatch a van with a professional chef to the customer’s door, where the final cooking would be completed onboard.

In a CNBC interview, Lore said Wonder Group could reduce costs by preparing ingredients ahead of time. Because each mobile vehicle was assigned to a specific area, it could serve multiple customers and complete multiple transactions on a single route instead of returning empty.

In January 2023, however, Wonder Group adjusted its strategy, conducted layoffs to accelerate its path to profitability, and shifted toward opening physical stores.

At the time of the article, Wonder Group had opened three stores in New York and two in New Jersey, with plans to reach 10 stores by the end of the year. Each store had more than a dozen seats, allowing customers to dine in, pick up orders, or order delivery. Lore said the company planned to open at least more than 20 additional stores the following year.

Planned Blue Apron acquisition

In early November 2023, Wonder Group also planned to acquire publicly listed meal-kit company Blue Apron for $13 per share, or $103 million in total. The transaction was expected to close in the fourth quarter of 2023.

Blue Apron generated $460 million in revenue in 2022 and processed more than 8 million orders for over 350,000 customers.

Blue Apron listed on Nasdaq in 2017 at $10 per share. Once a leader in home meal-kit delivery, the company went through years of ups and downs and had recently transformed into a more asset-light business. Earlier, Blue Apron sold its fulfillment centers, related assets, and certain channel authorizations to fresh-food supplier FreshRealm for $50 million.

B2B angle: WonderWorks

With the Nestle investment and the planned Blue Apron acquisition, Wonder Group aimed to further strengthen its B2B business, WonderWorks. Its main customers included schools and hotels, and the core offering centered on selling equipment, ingredients, and menus built around celebrity chefs.

Note: investment, IPO, acquisition, store-opening, and forward-looking figures above are historical as reported in November 2023.