Wonder Raises $700M, but at What Cost?
New apps head to Minneapolis, DoorDash adds Giant Eagle, courier rest areas
Evidently there’s still money to be had for big delivery ideas, as Marc Lore’s just raised $700 million for his food hall cum delivery startup. But the devil’s in the details, as we explore below.
This week’s edition is brought to you by Curbivore — 3/28-29 in DTLA.
Today:
Wonder-ing About Marc Lore’s True Valuation
Mini-apolis, Big Ambitions for Uber Replacements
Chart Time | Where Drivers Rest
Caw! Caw! DoorDash Adds Giant Eagle
FOOD HALLS | Marc Lore’s Wonder Raises Fresh $700M
Wonder, the food-in-trucks-cooker that begat a series of upscale food halls that’s now morphing into a “super app for mealtime” just closed a whopping $700 million financing round. Founder Marc Lore is pouring in $100M himself, with additional cash coming from NEA, GV, Accel, Bain Capital Ventures, Forerunner, Alpine and Harmony, Watar Partners, Dragoneer, Jefferies, Red & Blue Ventures, CAZ Investments, Kuvare Insurance, Fubon Ventures and Amex Ventures (it takes a lot of checks to add up to $700M these days…) The company will use the cash to scale from 11 to 35 locales by year’s end, aiming for 90 by 2025. Wonder will also keep investing in food-service innovations, restaurant partnerships and back-end tech. That sounds ambitious, but Lore claims that the company is already hitting unit-level profitability.
The Big Picture: With his ecommerce track record, Marc Lore is a VC fundraising machine, having now raised a whopping $1.5 billion for Wonder — as much money as many a Caribbean country’s GDP. But while his 2022 fundraise scored the co an impressive $3.5B valuation, even Lore isn’t immune to the intricacies of today’s tighter venture environment. Evidently this new capital comes as a simple agreement for future equity (SAFE) note. Traditionally used for earlier stage startups, these structures allow investors to score a discount on a later valuation — while artfully allowing Wonder to avoid a dreaded down-round today. Earlier reporting pegged this discount to be as high as 50%.
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We’re bringing together 1,000 of delivery, mobility, curb management and restaurant / retail tech’s finest minds, mouth-watering (and free) cuisine, radical new technology and so much more.
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POLICY | Startups Vie to Replace Uber, Lyft in Minneapolis
With the Twin Cities about to lose the twin apps of Uber and Lyft, Minneapolitans are in the need for some new apps and a number of competitors are hoping to fill the void. One option is Wridz (presumably pronounced like “rides” and not like something you’d want to get rid of.) It works by letting drivers keep 100% of the fares, but only after ponying up a $100/mo subscription, which could be a pricy gamble for cash-strapped workers. Empower is also coming to town, with the app saying it’s already signed up 200 drivers. Empower claims to be purely software — “We sell software just like OpenTable sells software to restaurants” notes its Founder, a dodge it helps will let it avoid some regulations.
The Big Picture: Empower’s been in hot water in other cities for its approach; it was subject to a cease and desist in D.C. from late 2020 until last month. And while Wridz is based in Austin, it’s not actually a holdover from the city’s fight with the TNCs nearly a decade ago: the company only launched a few years back. As we saw in Austin back in 2016, or in other more recently in other markets like Nashville, spinning up a new TNC can be difficult even under the most favorable of market conditions. Uber and Lyft had about 10,300 workers statewide, giving these new competitors some big shoes to fill. One big unanswered question, which makes today’s market very different from Austin’s eight years ago, is if any of these new apps will glom on delivery to offer their drivers more volume. Here’s one other idea — market laggard ASAP has a relatively strong presence in MN owing to their 2019 acquisition of hometown player Bite Squad. Might that be enough of a driver presence to try spinning up a TNC arm?
CHART TIME | Gimme A Break
While we’ve seen the 3PDs and some of their partners open up occasional worker rest areas in big cities, the truth is that most of the time couriers are on their own. So, where do they go when they need to take a break from schlepping grub? Rest of World takes a look at how couriers in developing countries manage: sounds like those sidewalks are mighty crowded.
3PD | DoorDash Adds Grocer Giant Eagle
DoorDash has on-boarded a new supermarket partner for hour-or-faster delivery: Western Pennsylvania-based Giant Eagle. While the two companies have been trialing operations since 2022, the 3PD will now service the grocer’s entire portfolio across Pennsylvania, Ohio, West Virginia, Indiana, and Maryland. While some readers may not be familiar with the brand, Giant Eagle is the nation’s 42nd largest privately held company and the 36th largest grocer nationwide, putting it in the somewhat awkward “super-regional” category.
The Big Picture: DD has been on a news-making spree as of late, timed with world’s retailers gathered in Vegas for Shoptalk. DoorDash now boasts over 150,000 non-restaurant locations on its Marketplace and Drive platforms and notes that more than 99 percent of its monthly U.S. consumers have access to grocery and convenience retailers.
A Few Good Links
Instacart earns Media Rating Council accreditation. McDonald’s new CosMc’s concept expands to Texas, adds protein drinks. Chipotle plans 50-to-1 stock split as shares tease $3k per. Walmart experiments with checkout lane just for Spark delivery drivers and Walmart+ members. Red Sea and Panama Canal issues push cargo to West Coast ports. TMI: “It’s a flavor eruption!” Wing Snob targets 100 new locales, Marco’s Pizza aims for 50 new stores in MX. FAA and local regs on air taxis may clash. McDonald’s CEO adds Chairman title. Restaurant discovery app NeoTaste raises €15.1 million. Domino’s buys out Irish franchisee. Panasonic launches new resto kiosks. ParTech buys TASK Group for $206M. NYC clamps down on wood and coal-burning pizza ovens. Nuro picks Nvidia Drive to power next-gen delivery AV. Deliveroo announces 2024 Restaurant Awards. DC makes Fair Meals Delivery Act permanent.
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