Mumbai-based food delivery startup Thrive has announced the shutdown of its consumer app after four years of operation. The decision comes amidst cutthroat competition in the food tech sector, led by industry giants Zomato and Swiggy, which continue to dominate with deep funding and innovative strategies.

A Tough Call in Tough Times

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Thrive's co-founder, Krishi Phagwani, shared the news on LinkedIn, calling it a “difficult decision” for the company. Despite the closure, Thrive’s other business verticals, including Thrive ONDC, Thrive Direct and Thrive Marketing Suite, will be handed over to suitable industry partners for continuation.

Phagwani assured stakeholders that payments, tax compliance, reporting, and invoicing will be handled seamlessly during the transition. Expressing gratitude, he wrote:

"We are proud of what we have built together and thank our restaurant partners, customers, investors and team for believing in our mission."

Big Players Backed Thrive

Thrive managed to secure significant backing from major corporations. In 2021, Jubilant Foodworks, the parent company of Domino’s and Popeyes, acquired a 35% stake in the startup. Following this, Coca-Cola invested in Thrive by taking a 15% stake in 2023.

Battling Industry Behemoths

Thrive faced mounting challenges as dominant players like Zomato and Swiggy strengthened their foothold in the market, especially after pandemic-driven transformations. Both companies expanded their portfolios by entering the quick commerce segment and adopting strategic acquisitions.

Phagwani acknowledged the uphill battle, stating:

"The market is dominated by large, well-funded giants, making it incredibly difficult for smaller, mission-driven platforms to scale and address restaurant needs effectively."

Thrive’s Numbers and Challenges

As per Tracxn data, Thrive raised a total of $2.5 million in equity funding across three rounds. However, the company’s financial performance revealed growing struggles. In FY23, revenue rose marginally to Rs 2.5 crore from Rs 2.3 crore in FY22, but net losses widened significantly, jumping from Rs 2.8 crore to Rs 7.4 crore.

The decision to close the consumer app signals the growing challenges smaller players face in a market dominated by established giants with vast resources. For Thrive, this chapter ends as it transitions to a new phase of strategic partnerships and operational shifts.