Investments

Investments Stay Afloat And Thrive Market Bags $111 Million

In a world where sunshine in the news is in something of short supply, the good folks at Thrive Market can add good news for those in need of some to report to the list of things they deliver.

You can’t eat it, but after the week the world’s markets have been having, reporting numbers in black ink is pretty delicious.

Which is oddly appropriate for Thrive, since their actual core line of work is getting organic groceries directly into consumers’ hands, and at an affordable price.

Making it far from the only player in its space. Through its tightly-entwined relationship with Whole Foods, Instacart is the go-to name in startups bringing organic grocery on demand. Other speciality players in the market like Vitacost or Grub Street offer similar services. And with its recently announced pair-up with Uber, Walmart could potentially be getting in on the act. Meanwhile, AmazonFresh remains the looming terror in the entire grocery delivery segment.

And it is a segment that has seen casualties. Organic delivery service Good Eggs was forced to pull back its operations to the San Francisco Bay area after they learned what so many who deliver consumer groceries have learned before: it’s much harder than it looks to get to scale and make money while doing it.

But Thrive Market, which ships organic groceries to consumers anywhere in the continental United States, is growing. A little over two years old, the team is reportedly approaching $120 million in annual revenue and boasts about 300,000 paying members. Members pay $60 per year.

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

Their selling point and secret sauce is a time-honored favorite: low price. Thrive Market’s pitch to consumers is that they can count on saving 50 percent, on average, off of standard retail prices. Thrive gets to their low price point by purchasing their goods from brands directly. Brands currently found on the platform include Zico, Yogi and Thrive’s own branded products. Apart from their organic focus, Thrive works to appeal broadly to the specialty food demographic with GMO free, gluten-free and paleo-friendly offerings.

The biggest growth regions for Thrive are in the midwest and southeast, far from the tech hubs that are usually the power center behind grocery and organic goods delivery services. Lovelace notes that the likely explanation is price point, and Thrive’s ability to use it to tap into a segment of the market where organic foods aren’t traditionally big sellers.

And with with its track record of growth — and unusual path to scale — it has captured some very significant funds of late in a $111 million Series B funding round, led by Invus. That will add to the $30 million Thrive raised last year. The latest round saw further investment from Greycroft Partners, e.ventures and Cross Culture Ventures. There was also a bit of celebrity interest, with Demi Moore and John Legend both investing.

“The Thrive team has done an incredible job executing this innovative model and has consistently performed beyond our expectations,” said Dana Settle, co-founder and partner at Greycroft. “We are thrilled to continue to support them.”

This Week In Investments 

Continued (relative) buoyancy marked the Investment Tracker through the week that ended June 24, with more than $1 billion in investment activity. That’s a nice change of pace from the torpor seen earlier in the season, when the numbers had been low triple digits, and a little more, at best.

It’s rare that we see anything approaching a double-digit percentage contribution for B2B, but that happened this week, with B2B giving over 11 percent of the week’s fund flows, eating a bit, just a bit, into B2B’s dominance.

The top 10 deals of the week show a rapidly descending ladder of deals with no huge outsized deal. The ICICI Home Finance deal, via banking, where the India firm TPG is buying the firm for $323 million, topped the list. The Phoenix Companies got an infusion of $100 million in equity capital from Nassau Reinsurance as part of a larger deal where the former was taken over by the latter.

Branching out into the banking industry, the wave of smaller bank takeouts in the industry, Carolina Bank is being bought by First Bank for $97 million.

How about a little blockchain investment? Circle got $60 million in funding, coming from Baidu and IDG, among others. The money will be used for expansion into China, with the creation of a Chinese unit.

For the month, and as we close down on a quarter, we can see a decent levels of activity from across B2B and FinTech, with B2B at 41 percent and FinTech at 59 percent, roughly speaking.

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