There's a New Food Delivery Moonshot in Town

Delivery startups don’t work, right? UberEats, DoorDash, and InstaCart have been propped up by funding since inception. There is a graveyard a mile long filled with others that have crashed and burned. Zume pizza, Sprig, SpoonRocket, Maple are a few that have collapsed with varying levels of brilliance. So how has yet another food delivery startup raised $1.5 billion over the past three years?

From the ashes of the delivery startup reckoning, enter Wonder.

Wonder is the “super-app of meal-time,” which allows customers to order from 30 unique restaurants and get delivery under 30 minutes. Wonder is led by founder & CEO Marc Lore and holy smokes, this guy has a resume. He built and sold Jet.com to Walmart for $3.3 billion. That was after building and selling Quidsi to Amazon for $545 million. And before beating Jerry Rice in a 40-yard dash and buying the Minnesota Timberwolves with A Rod (though the deal may fall through).

With Marc leading the charge, Wonder’s innovation comes in the food preparation process. The company maintains a network of large commissary facilities which distribute individual dishes to its restaurants. These dishes are then prepared in minutes by employees with little cooking skill required. Everything on Wonder’s menu, which includes recipes from celebrity chefs Jose Andres and Bobby Flay, is designed to be cooked using three pieces of equipment: a hot water bath, a rapid-cook oven, and a fryer. All these standardizations result in speedier processes and quicker deliveries.

The company is making significant technology investments as well with “back-end technology to drive down food waste; next gen kitchen designs to improve throughput and consistency; and an enhanced delivery network that will ensure that couriers – and, more importantly, customers’ orders – never wait,“ says Marc Lore in a blog post.

If this story sounds familiar, it might be because you saw Zume’s epic implosion last year. Zume raised $455 million to transform pizza delivery through the use of robots, and cooking on the go in its delivery trucks. Despite hundreds of millions in investment, the company encountered a fatal flaw: cheese kept sliding off the pizza as it was cooked in a moving vehicle. The company pivoted to sustainable package engineering in 2020 before being wound down.

Funnily enough, Wonder also began with a cooking-on-the-go model before pivoting in early 2023. Their problem? It was too hard to find parking.

This coincidence aside, I think Zume ultimately failed because it didn’t solve a real problem. If you’ve ordered Domino’s recently you probably noticed that it came relatively quickly with consistent quality. Consumers don’t want to pay a premium for pizza that is imperceptibly faster or fresher.

Looking at Wonder, I can’t help but wonder the same thing: is there a real problem here? DoorDash moves quickly and has a ton of variety. Uber Eats can bring goods from multiple merchants in the same delivery. Eliminating waste is compelling but at the end of the day you need to give customers an experience that is better than what they already have.

With $1.5 billion raised from top-tier investors, there must be more going on at Wonder. It’s hard to bet against a guy like Marc Lore who has built and sold two massive companies, proving his operating chops beyond question. Many have tried and failed in this category. Perhaps he can pull off the impossible, rewriting the rules of food delivery.

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