Wonder — the food-delivery startup that just got a $100 million investment from Nestle — is dangling unusual incentives for investors as it scrambles to raise even more cash, The Post has learned.
The company headed by billionaire Marc Lore, who previously made a bundle founding Diapers.com and Jet.com, is offering deep discounts to investors who buy convertible shares in a deal valuing the company at $3.5 billion — the same valuation Wonder fetched when it last raised money in June 2022, sources said.
Under terms of the new offer, investors who buy the securities now will be granted the option of converting them into stock at a 50% discount to the company’s valuation during its next fund-raising round, according to sources briefed on the talks.
Wonder is telling investors it believes it can achieve a valuation between $4.5 billion and $5 billion during that next round, the sources said, although the company hasn’t provided a timeline, a source said.
Wonder and Lore declined to comment.
One investor who was pitched on the deal passed on the offer, saying it appeared “pretty desperate” and likening it to a “down round” when a company is forced to lower its previous valuation to raise cash.
Marc Lore is transforming Wonder which was a very upscale delivery business to brick and mortar stores and food service.Matthew McDermott
Earlier this week, Wonder confirmed that it received a $100 million investment from Nestle. Wonder also has entered a strategic partnership with the food giant to sell high-tech kitchen equipment and pre-prepared food ingredients to businesses such as hotels, hospitals and sports arenas, CNBC reported.
The $100 million investment was described as a “cash infusion,” with Lore adding that the money would help Wonder scale its business.
Nestle will begin offering Wonder’s kitchen equipment to its food-service clients.
In late September, Lore’s company announced it was buying meal-kit company Blue Apron for $103 million.
Lore said the deal would help Wonder achieve its goal of creating a “super-app” for high-end food delivery.
Lore is selling shares in his once-hot startup at a discount as he reinvents Wonder.Matthew McDermott
Initially, Wonder had planned to create a nationwide network of food trucks with menus inspired by famous chefs such as Bobby Flay and Marcus Samuelsson.
The company had abandoned those plans by last January — and laid off hundreds of workers — as part of a shift toward a more traditional, cost-effective food delivery business model using brick-and-mortar restaurants.
Lore recently told the trade publication Restaurant Business that Wonder’s three active locations at the time were not yet profitable, but were pacing to generate nearly $4 million in sales this year.
Wonder plans to have 10 stores open by the end of the year.
Lore boldly asserted that as many as 7,000 locations could eventually exist nationwide.
Lore hopes he can turn around Wonder and the Karl-Anthony Towns-led Minnesota Timberwolves.USA TODAY Sports via Reuters Con
In September, Wonder lost its COO Stephen Goldstein, who left the role after less than one year on the job.
As The Post exclusively reported at the time, Goldstein has taken a new gig as president of Kernel, the plant-based automated fast-food startup led by Chipotle founder Steve Ells.
Lore had just taken steps to build out Wonder’s leadership team, adding ex-Sweetgreen marketing chief Daniel Shlossman as marketing chief in May and former Blackstone executive Kelley Morrell as its CFO in June, according to the Wall Street Journal.
Elsewhere, Minnesota Timberwolves Owner Glen Taylor said in October he believed Lore and Alex Rodriguez were pushing back their deadline to increase their ownership of the team from 40 percent to 60 percent from December to early next year.
He said he had been assured they had the money.
Source link: https://nypost.com/2023/11/10/business/marc-lores-wonder-seeking-5b-valuation-source/