Sweetgreen operates 20 Infinite Kitchen restaurants currently, and will continue to grow them. | Photo courtesy of Sweetgreen.
Sweetgreen is selling its robotic-restaurant-building business.
The fast-casual chain on Thursday announced an agreement to sell Spyce, the technology company that developed Sweetgreen’s automated Infinite Kitchen makelines, to Wonder, the rapidly growing mealtime platform.
Under the deal, Sweetgreen will receive $100 million in cash, plus shares of Series C preferred stock of Wonder, with an implied value of $86.4 million, based on the price per share at a recent equity financing.
Sweetgreen has also put in place a supply and license agreement that will allow the chain to continue to open its Infinite Kitchen restaurants, and take advantage of new technologies, as they develop.
Jonathan Neman, Sweetgreen’s CEO and co-founder, said in a call with analysts that the agreement allows Sweetgreen to have the equipment at cost, plus about 5%. The costs for delivery, installation and service would be about the same. But the sale would remove the financial burden of the Spyce business from Sweetgreen’s balance sheet.
And, in time, the cost of building Infinite Kitchens will likely go down with scale, he said.
“We actually think this will help us bring the unit cost down, have [Wonder] invest more in the R&D and the innovation of a potentially cheaper and more effective automation unit,” he said. “So overall, it’s a win-win in that scenario.”
The 270-unit chain operates 20 Infinite Kitchen units across the U.S., with another 10 expected to open before the end of the year.
For Sweetgreen, the move strengthens its balance sheet and allows the company to focus more on operations after yet another challenging quarter.
The chain said same-store sales fell 9.5% during the Sept. 28-ended third quarter, including an 11.7% decline in traffic and product mix. Sweetgreen’s net loss widened during the quarter to negative $36.1 million, compared with a loss of $20.8 million a year ago.
Sweetgreen acquired Spyce in 2021 for about $70 million to build a restaurant that could leverage automation to improve accuracy and reduce labor costs.
The first Infinite Kitchen opened in 2023 near Chicago, and growth of the automated model has slowly begun to accelerate. The Infinite Kitchens have proven to be faster, more accurate and consistent than traditional restaurants, while boosting margins.
Under the sale agreement, 38 Spyce engineers, including co-founders Michael Farid, Kale Rogers, Brady Knight and Luke Schlueter, will transition to Wonder.
“We’re incredibly proud of the work our team and the Spyce team have done to develop, scale and monetize one of the world’s most advanced robotic food technologies,” said Neman, in a statement. “We remain deeply confident in both the Infinite Kitchen’s future impact and the brilliant team behind it. As we focus on driving long-term, profitable growth, our collaboration with Wonder will enable us to continue expanding and enhancing the Sweetgreen experience for our guests, while unlocking new opportunities for innovation and scale in the years ahead.”
Founded by Marc Lore, Wonder began as a digital food hall company, but has grown with acquisitions that have included Grubhub and the meal-kit business Blue Apron. The company has raised more than $2 billion in private funding, and now Wonder aims to be a sort of mealtime super app. Wonder has about 80 locations, which offer a mix-and-match selection of menus from chefs and restaurants across the country.
Last month, Wonder said it is piloting robotic delivery with the autonomous vehicle company Avride.
In a statement, Lore said Wonder is evolving into a “truly scalable, technology-powered food platform.”
The acquisition of the Spyce technology will enable Wonder to eventually “operate more than 100 restaurants across any cuisine type and price point, all out of a small kitchen, while serving food faster, hotter and with flawless accuracy and consistency.
“It furthers our mission to make great food more accessible, bringing more restaurants to more people, in more places, at more times of day and at more affordable prices,” said Lore.
UPDATE: This article was updated with new information from the earnings call.
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