Thrive Shuts Down Consumer App Amid Rising Competition from Zomato and Swiggy
Despite these major investments, the company faced challenges in scaling its operations to compete with well-funded players like Zomato and Swiggy, which enjoy widespread consumer loyalty and massive brand recognition.
Mumbai-based food delivery startup Thrive has decided to bid farewell to its consumer app after four years of operation. The move comes amidst intense competition in the food delivery market, where giants like Zomato and Swiggy dominate. Thrive struggled to carve its niche despite notable investor backing, including Jubilant FoodWorks, the parent company of Domino’s, and beverage giant Coca-Cola.
Thrive’s Journey and Key Investors
Thrive started in 2019 with a vision to provide an alternative to Zomato and Swiggy by focusing on restaurant partnerships and direct customer engagement. In 2021, Jubilant FoodWorks, known for brands like Domino’s and Popeyes, acquired a 35% stake in Thrive. Following this, Coca-Cola invested in the startup, purchasing a 15% stake in 2023.
Despite these major investments, the company faced challenges in scaling its operations to compete with well-funded players like Zomato and Swiggy, which enjoy widespread consumer loyalty and massive brand recognition.
Announcement by Thrive’s Co-Founder
Thrive’s co-founder Krishi Fagwani shared the news of the app’s closure in a heartfelt LinkedIn post. He explained that the decision to shut down the consumer-facing app was not easy but was necessary to ensure a smoother transition for the company’s other ventures.
Fagwani highlighted that the company will now focus on its other offerings, such as:
- Thrive ONDC (Open Network for Digital Commerce): A platform designed to connect restaurants with customers through an open marketplace.
- Thrive Direct: An initiative aimed at direct restaurant-to-customer interactions.
- Thrive Marketing Suite: A tool to assist restaurants with digital marketing and customer retention.
He assured all stakeholders, including restaurants, customers, and investors, that there will be no disruptions in payment, tax compliance, or reporting processes.
Financial Performance of Thrive
According to data from Tracxn, Thrive had raised a total of $2.5 million (₹20 crore) in equity funding over three funding rounds.
In terms of revenue, the company recorded ₹2.5 crore in FY23, a marginal increase from ₹2.3 crore in FY22. However, this growth was not sufficient to sustain operations, given the high operational costs and the competitive nature of the food delivery industry.
Challenges Faced by Thrive
In his LinkedIn post, Fagwani highlighted the dominance of heavily-funded giants in the market. Platforms like Zomato and Swiggy have received substantial investments, enabling them to expand aggressively, offer heavy discounts, and maintain customer loyalty.
For a smaller, mission-driven platform like Thrive, scaling operations while addressing the unique needs of restaurant partners proved to be a significant challenge. The lack of sufficient resources to compete with these major players ultimately led to the decision to discontinue the consumer app.
What Lies Ahead for Thrive?
While the consumer app has been discontinued, Thrive plans to strengthen its presence in other areas of the food-tech industry. The company’s focus on ONDC, direct partnerships, and marketing tools signals a shift towards B2B solutions, helping restaurants grow independently of larger aggregators like Zomato and Swiggy.
Thrive’s exit from the consumer app market is a testament to the challenges faced by startups in an industry where customer acquisition and retention are heavily dependent on deep pockets and brand recognition.
