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Friday, Mar 31, 2023

Thrive Market Leaps to $32.9 Million Round

Online health food store Thrive Market has raised a $32.9 million investment round, according to a Securities and Exchange Commission filing.

The company declined to comment on the round, only to say it wasn’t yet finished raising money and would make an announcement next week.

The SEC filing said Thrive Market raised money from 191 investors, an extraordinarily high number of backers. That number may indicate Thrive Market raised cash through a syndicate of angel investors and venture capital firms, perhaps on a platform like AngelList.

Dana Settle, partner at downtown Los Angeles venture capital firm Greycroft Partners, was listed on the filing, indicating that firm may have participated in the round. Settle could not be reached for comment.

Thrive Market sells about 2,500 different health foods, supplements, household, personal care and beauty products at near wholesale prices online. The company makes money through a $60 a year membership fee; a business model that is similar to Costco or Amazon Prime.

The company raised a $1 million seed round from angel investor Brian Lee and others in 2013. Lee is a co-founder and the chief executive of Santa Monica’s The Honest Company, an e-retailer of non-toxic household products that also offers product subscription services. Additionally, Lee has invested in online clothing subscription company JustFab of El Segundo.

Leaping from a $1 million seed round to a $32.9 million round is rare and ambitious. The bet resembles, albeit on a smaller scale, $225 million in investments raised by one-year old membership e-commerce site Jet.com, in advance of its launch this week. Jet.com of Montclair, N.J. and Thrive Market are each betting through a combination of investor cash, Internet efficiency and the membership model they can quickly and profitably reorganize their respective retail markets.

Technology reporter Garrett Reim can be reached at greim@labusinessjournal.com. Follow him on Twitter @garrettreim for the latest in L.A. tech news.

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