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Online organic grocery startup Thrive Market has faced plenty of hurdles familiar to any business trying to break into the difficult online shopping space: low profit margins, tricky distribution, cautious investors.

But its latest challenge is one that may be foreign to pricier industry peers: How to persuade the bureaucracy-bound providers of government food stamps to undertake the expensive and logistically difficult process of allowing these credits to be used online.

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The company, best described as an Internet-only cross between Whole Foods, Toms Shoes and Costco, recently launched a petition to that effect aimed at the U.S. Department of Agriculture with backing from brands like Clif Bar, affordable food nonprofits and celebrities like Matthew McConaughey and Russell Simmons.

At issue is one of the central premises of Thrive Market's business model: For every $60 shopping membership it sells, it gives another to a low-income family for free. But many of these low-income families aren't able to take advantage of the service because they rely on food stamps to cover expenses.

The petition is only the most public episode in fruitless talks Thrive Market's founders have been having behind the scenes with the agency since the startup was conceived nearly two years ago.

"It is going to happen -- the question is when and how," says Thrive Market co-founder and co-CEO Gunnar Lovelace. "Our concern at this point is that with how slow the process has been going, it could take five to ten years to roll out nationally."

The startup was founded with a social good bent rooted in Lovelace's own experience growing up poor with a single mother. 

"Personally, it's kind of the only way I'd want to do it at this point," Lovelace says. 

The idea was to sell organic specialty foods at a more affordable price than brick-and-mortar stores. The company would do so by cutting out supply chain middlemen that mark up prices in the traditional grocery market.

That mission, along with the founders' lack of experience with e-commerce and the notorious difficulty of the space, initially prompted skepticism from investors. Before the company finally launched, Lovelace said it was rejected by 50 venture capital firms.

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"Wealthier men located in Los Angeles, New York and San Francisco felt like there were enough solutions in the market today and didn't really understand that the current solutions for health food only serve the 3% of the country," Lovelace said.

Instead, they turned to individual online backers who got the company off the ground and gave it enough traction to catch the eye of the venture capitalists who had passed it over. 

This week, the company announced its second investment round -- a $111 million infusion led by the investment firm Invus along with existing backers like Greycroft Partners. That money will feed efforts to grow the service, including marketing, health educational materials the company puts out and social campaigns like the food stamps petition. Thrive has so far reached 300,000 members, Lovelace says.

Even now that it has a stamp of approval from big-name Silicon Valley investors, Lovelace says the connections the company made with its early online fundraising efforts are still helpful for lobbying efforts like the food stamps petition.

"It's given us a lot of capabilities and competency to do campaigns like the food stamps campaign, where we can galvanize a network of supporters," he said.

With an extra vote of confidence from investors, Thrive Market will take the food stamps campaign to Washington next month, holding its first congressional briefing with Rep. Tim Ryan, a Democrat from Ohio.  

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