Mumbai-based food delivery startup Thrive has announced the closure of its consumer app after four years of operation. The decision comes amid fierce competition in the food technology space led by industry giants Zomato and Swiggy, which continue to dominate with deep pockets and innovative strategies.
Tough decisions in tough times
Thrive co-founder Krishi Phagwani shared the news on LinkedIn, saying this was a “difficult decision” for the company. Despite the closure, Thrive’s other businesses, including Thrive ONDC, Thrive Direct, and Thrive Marketing Suite, will be turned over to appropriate industry partners for continuity.
Phagwani assured stakeholders that payments, tax compliance, reporting and invoicing will be handled seamlessly during the transition. Expressing his gratitude, he wrote:
“We are proud of what we have built together and are grateful to our restaurant partners, customers, investors, and team for believing in our mission.”
Major companies support growth
Thrive was able to secure significant backing from major corporations. In 2021, Jubilant Foodworks, the parent company of Domino’s Pizza and Popeyes, acquired a 35% stake in the startup. In response, Coca-Cola invested in Thrive by acquiring a 15% stake in 2023.
Battle against industry giants
Especially after the pandemic-induced transformation, Thrive faced increasing challenges as dominant players like Zomato and Swiggy strengthened their foothold in the market. Both companies entered the quick commerce space and expanded their portfolios by adopting strategic acquisitions.
Acknowledging the uphill battle, Phagwani said:
“The market is dominated by large, well-funded companies, making it extremely difficult for smaller, mission-driven platforms to scale up and effectively serve the needs of restaurants.”
Thrive numbers and challenges
Thrive has raised a total of $2.5 million in equity funding across three rounds, according to Tracxn data. However, the company’s financial performance reveals that its struggles are increasing. Revenue for FY23 increased marginally to Rs 2.5 billion from Rs 2.3 billion in FY22, but net loss widened significantly, jumping to Rs 7.4 billion from Rs 2.8 billion.
The decision to shut down consumer apps signals the growing challenges faced by smaller players in a market dominated by established giants with vast resources. For Thrive, this chapter ends with a new phase of strategic partnerships and operational shifts.
