The demographic of health-conscious consumers is growing rapidly, and yet there is no dominant online player that provides high-quality, organic, natural products to those consumers.
Thrive Market, an L.A.-based startup that just closed a $30 million Series A round, is looking to do just that.
The company aims to be a hybrid of Whole Foods and Costco, where users pay $60/year for a membership to shop for health-conscious products across a wide variety of verticals — food, baby supplies, home goods, cleaning products, bath products, etc. — at or below the price of their conventional equivalent.
In other words, Thrive Market buys the very best natural and organic products in bulk, at wholesale prices, and passes those savings on to the consumer, selling the same products at no (or almost no) margin. Revenue is generated through the membership fees ($5/month) which covers the costs of operation and fulfillment.
“When we think about approaching a healthy lifestyle as a consumer, there are three main barriers,” said co-founder and CEO Gunnar Lovelace. “Affordability, geography, and education all play a role in purchasing decisions, and we are looking to give everyone access to these products at an affordable price, anywhere, without being overwhelmed by all the information and options before them.”
That said, Lovelace explained that Thrive Market won’t carry every brand of almond butter, but rather curate the very best few so that users can trust what they’re buying without having to do a ton of their own research.
Thrive Market also offers educational content around products and healthy living in general so that its members become more and more acquainted with the facts.
While memberships are a primary revenue generator for Thrive, the company is on a mission to provide access to these goods for anyone, and has thusly partnered with a number of non-profits to offer a free membership to families in need for every paid membership on the platform.
Soon, Thrive Market will add an authentication system that will allow for students, military families, teachers, and other low-income demographics to verify who they are and receive a free membership to the platform. In fact, the company is partnering with Feeding America in the fall to give away 1 million memberships.
In terms of the $30 million funding — led by Greycroft with participation from Scripps Network, CAVU, Powerplant Ventures, and strategic investors like John Legend, Toby McGuire — and Demi Moore — the company plans to use part of it to open up a new 275,000 square-foot fulfillment center in Indiana. Currently, Thrive Market only has one fulfillment center (40,000 square feet) on the West Coast, which makes serving the East Coast population more difficult.
Thrive previously raised $8 million in convertible notes exclusively from strategic investors such as Deepak Chopra, Jillian Michaels, Tony Robbins and many more.
In the eight months since launch, Thrive Market has grown to 1 million registered users, with more than 100k active members, with 75 percent conversion from the free trial to a paid membership. According to the founders, Thrive is tracking to $100 million revenue run rate for the first year since launch.
If you want to check out Thrive Market, hit up the website here.