Meals supply startup Marvel Group is shedding staff and scrapping plans to construct a nationwide fleet of meals vehicles in favor of a extra typical and cheaper restaurant supply mannequin.

The change is a major one for the four-year-old startup, which presently prepares meals in about 500 meals vehicles that ship to households in suburban New Jersey and New York. The corporate has raised $900 million in enterprise capital and was valued at about $3.5 billion final yr.

Marvel majority proprietor and CEO Marc Lore stated in an interview that the brand new technique provides the corporate a quicker path to profitability that requires much less capital. Marvel wanted to boost one other $1 billion over about two years to develop its fleet of cell kitchen vehicles on the tempo it hoped, Mr. Lohr stated. Now it plans to draw round 350 million {dollars} in the identical interval, he stated.

“I see a a lot greater alternative to be extra worthwhile, extra capital environment friendly and barely enhance the shopper expertise” of brick-and-mortar kitchens in comparison with a meals truck system, stated Mr. Lohr, a seasoned entrepreneur and ex-Walmart. Inc.

e-commerce government.

The spin-off is an indication that even Mr. Lore, who has introduced traders income with previous ventures akin to Diapers.com and Jet.com, is going through an investor market the place financing is tightening and rates of interest are rising. Startups are going through rising strain to show a revenue quicker and use much less capital than in earlier years. Many startups are shedding staff, delaying preliminary public choices and pivoting to new enterprise fashions.

Marvel has laid off about 400 staff in current months and presently has about 1,400 staff, a spokeswoman stated. The corporate plans to put off extra individuals within the coming months, Mr. Lohr stated, however will finish the yr with extra staff than it presently has because it opens bodily areas.

The corporate will full its fleet of vehicles within the coming months and open about 10 bodily areas in New York and New Jersey over the subsequent yr, Mr. Lohr stated. The mannequin resembles a ghost kitchen, a sequence of kitchens that prepares a number of cuisines from one location for native supply. Marvel’s model will supply restaurant seating and takeout, in addition to supply and meals preparation from specialty eating places with which it has licensing offers.

Not constrained by the confines of a supply truck, the bodily location permits Marvel to promote to extra eating places without delay, Mr. Lore stated. The corporate can use its data of constructing high-quality meals in small areas to be a extra environment friendly model of a high-end restaurant, he stated.

The established areas additionally permit Marvel to raised management supply occasions, cut back errors as a result of extra staff assessment every order and get to different cities quicker, he stated.

Mr. Lor offered Quidsi Inc., an e-commerce website for diapers and different family merchandise, to Amazon.com Inc. in 2010 for $500 million. He offered Jet.com to Walmart for $3.3 billion in 2016. Walmart finally spun off Jet, turning the operation into its broader e-commerce enterprise. Mr. Lore left Walmart in early 2021 and took over as CEO of Marvel later that yr.

Marvel has licensing offers to make use of the names and recipes of eating places akin to Bobby Flay Steak and Di Fara Pizza. It’ll proceed to make meals from these eating places at its bodily areas, he stated. It additionally goals to develop its enterprise by promoting meal kits and quick-cooking oven software program to different companies, akin to conference facilities.

Marvel will start phasing out the vehicles in choose New Jersey neighborhoods subsequent week, Mr. Lohr stated. That course of will final till spring. Because the vehicles disappear, the corporate hopes to open mounted areas that may serve present clients along with new areas, he stated.

That shift might please some New Jersey residents, who’ve been flying instead of Marvel vehicles that idle in tree-lined neighborhoods to cook dinner and serve meals, in line with a Wall Road Journal article final summer season.

Electronic mail Sarah Nassauer at Sarah.Nassauer@wsj.com

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