June 29, 2016

Los Angeles-based online organic, natural and ‘free-from’ food platform, Thrive Market, has raised a notable $111 million Series B led by New York-based investment firm, Invus, and including Greycroft Partners, E-Ventures, and Cross Culture Ventures, according to the New York Times.

Similar to Costco or BJ’s, Thrive operates under a membership structure whereby its 300,000 customers pay $60 per year to have the ability to buy organic foods, personal care and beauty products, home products, and supplements at prices  up to 50% lower than traditional outlets, such as Whole Foods, by buying from brands directly and cutting out middlemen.

Competing with rivals, including Vitacost, iHerb, My Natural Market, Door to Door Organics and Green Chef Corp, this round of funding brings Thrive’s total raisings to $141 million since its November 2014 launch, helping it to grow to see revenue that should top $120 million.

“The business has been growing like a rocketship,” CEO Gunnar Lovelace told TechCrunch. “The market for natural and organic products is growing so fast.”

Consumers are increasingly turning to the convenience of the internet for their grocery purchases. Internet Retailer reports that Morgan Stanley found that 34% of global online shoppers will buy groceries through the web this year, up from 21% last year, while U.S. consumers will spend $42 billion this year for online grocery orders compared to $16 billion last year.

Driven by such demand, the company plans to use this newest funding to build out its business with the addition of more white-label products and to boost is marketing, according to L.A. Business Journal. Meanwhile, Lovelace told Tech Crunch that the company is also planning to expand its content to include recipes, documentary video content, and health-related written content.

To support further market penetration, Thrive Market opened a new fulfillment center in southeast Indiana in October 2015 (45% of Thrive Market’s customer base is in the U.S. Midwest and Southeast) and will also be opening a new 300,000 square foot fulfillment center in Reno, Nevada to replace its current warehouse in Commerce, California.

—

Lynda Kiernan