When you want to disrupt an industry, timing matters. Serial entrepreneur Marc Lore would know — in 2016, Lore’s Jet was famously acquired by Walmart (WMT) for $ 3.3 billion and, six years prior, his Diapers.com sold to Amazon (AMZN) for $545 million. While he began his career as an e-commerce innovator, Lore’s latest venture, Wonder, is all about re-thinking a very different industry: food.
“If you think about the last innovation in food, you have to go back to the fast food franchises in the 1950s,” he told Yahoo Finance after his talk this week at TechCrunch Disrupt. “McDonald’s, Burger King, Kentucky Fried Chicken, and Wendy’s, all of these fast food chains boomed at the same time. I think the country was ready for it; the timing has to be right.”
Wonder is a food delivery startup co-founded by ex-Walmart exec Scott Hilton and Lore, who serves as chairman and CEO of Wonder Group. The company, which came out of stealth mode in 2021, closed a $350 million funding round earlier this year that brought Wonder’s total amount of debt and equity raised to $900 million. The company’s valuation in June accordingly shook out to $3.5 billion, according to The Wall Street Journal.
Wonder has often been described as a cross between ghost kitchen and food truck. Why does Lore say he’s confident that model can work? In part, it’s because our relationship to food and time has evolved since the ’50s, when fast-food became popular.
“It was a new speedy system that was about standardizing the cooking of foods,” he told Yahoo Finance. “What used to be diner fries and a burger could be cooked lightning fast, and at a really attractive price. That got more attractive as Americans were driving more. They were working, and didn’t necessarily have time to go to a diner. The country was ready for it.”
A premium on convenience
We are at a similar inflection point right now, argues Lore, who was president and CEO of Walmart’s U.S. e-commerce business until 2021.
“If you look at our country now, there’s never been a time in our history where we put such a price on convenience,” he said. “Younger generations especially are putting a premium on their time and aggregators have been booming the last five years as a result of this trend.”
‘Taking a page out of McDonald’s book’
Wonder offers a wide range of services and offerings, but at the center of it is a re-worked, fresher, and trendier in-home dining experience. Here’s how it works: you download the app, and on the app you have access to all kinds of high-profile restaurants and menus, from Bobby Flay Steak to Nancy Silverton’s Pizzeria Mozza. Then, a truck, geared up to optimize the cooking process, shows up at your door. Think of it as food delivery — if the restaurant kitchen came straight to your door.
“Most of the time in business, you’re trying to balance between different value propositions to the consumer,” said Lore. “You can’t have price, quality, and speed, but the idea is that, with Wonder, you get all three. We start by cooking quality food fast. Then, we get to lower prices because, by definition, if you’re cooking faster, you have lower labor costs. We actually are set up to win on all three legs of the value proposition.”
Wonder’s project is, in part, about re-vamping the food delivery business model, Lore added.
“The faster we deliver the food, the cheaper it is,” he said. “That’s how the business model’s set up. When you think about Amazon, Walmart, and Instacart… the faster they deliver, the more expensive it is.”
If Wonder sounds complicated, it’s because in many ways it is. From food science to logistics to tech, all the business’s moving parts have to be in sync for the experience to truly be seamless for consumers. In some sense, that’s something Wonder and the e-commerce ventures that made Lore’s name have in common; both Wonder and Jet seek to solve ubiquitous, everyday problems, like replacing laundry detergent or finding the right thing for dinner.
“I’ve thought there’s a way to take a page out of McDonald’s book, and we’ve invested in culinary engineering and food science,” said Lore. “We’re not just cooking food fast, we’re cooking great food that’s also fast. If it’s faster, it’s both at a lower price, and delicious. Traditional fast food’s not cutting it for this generation, but people still value convenience. We’re trying to build by systematizing great food.”
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks.
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