50% cheaper than traditional grocery stores, organic food company Thrive Market raises
It is said that a group of investors have placed a bet on a startup food company, and this company's goal is a bit ambitious——to become the “Costco of the internet (the largest membership-based warehouse store in the United States)”.
It is Thrive Market, an online healthy food supplier. Yesterday (June 27), the company announced the completion of 111 million USD in financing. This round of financing was led by veteran equity investment institution Invus, with venture capital firms Greycroft Partners, E-Ventures and CrossCulture Ventures participating. As part of this financing agreement, two Invus executives will join Thrive Market. The company said the money will mainly be used to develop its own branded products and to increase media marketing efforts.
Thrive was founded 3 years ago by a group of entrepreneurs and is one of the few startups that adopts a membership model. The company claims that users only need to pay 60 USD per year to enjoy lower prices than traditional grocery stores (such as the American healthy food supermarket chain Whole Foods) (only 50% of the standard retail price or even lower) when buying organic food. Their goal is very simple, which is to enable more consumers to buy what the founders call “better food”.
Thrive co-founder Nick Green mentioned in an interview: “We just want every American household to be able to enjoy a healthy lifestyle without spending a lot of money. In addition, people's demand for natural food makes this market very large.”
According to Nick, at first this startup idea did not stir any enthusiasm among investors at all, and was rejected by most investment institutions. Only one of the co-founders, Gunnar Lovelace, participated in Thrive's seed round investment. However, they gained affirmation from a large number of supporters online. The success of crowdfunding attracted the attention of some VCs, such as Greycroft, an institution that later participated in Thrive's financing.
At present, the company says its registered users have reached 5 million, paying members exceed 300,000, and the value of goods shipped by boat every day exceeds 20,000 USD. The company also said that although it has only been established for a few years, its annual revenue is expected to exceed 120 million USD.
It is worth mentioning that Thrive Market also includes a charitable element in its creation process: for every membership sold, Thrive also enrolls a low-income family as its paying member. And this plan is actually closely related to Lovelace's childhood: having grown up in poverty and relying only on his mother, he hopes to improve more people's lives through Thrive.
“We are indeed a for-profit business,” Lovelace stressed, “but we also want to take pride in continuously expanding social benefits.”
As the financing news was released, Thrive also announced that it plans to apply to the U.S. Department of Agriculture to allow users to use food relief vouchers online (food vouchers issued by the government free of charge or at low cost to the unemployed). Lovelace revealed that Thrive has already negotiated with the Department of Agriculture on this issue for more than 1.5 years, but has still not made any progress. But he said: “The public's voice is very strong, and the Department of Agriculture will definitely agree to our proposal in the end, but we just hope this result comes quickly.”