But is its model what customers want?
In the Summer of 2020, a mint green coffee cart appeared in Williamsburg’s McCarren park near the Greenpoint entrance — directly across the street from a Starbucks.
It was cute, and, at least to me, appeared to be a new independent coffee place. A few months later, when I saw that the cart’s parent company, Blank Street, had raised venture funding, I didn’t get it. Why on earth does a coffee cart need venture funding? Even upon finding out it was a chain, the math just didn’t make sense to me. Venture capitalists don’t generally seem to like brick-and-mortar businesses. Nor do they like asset-heavy companies. This looked like both.
But Blank Street claims to have cracked the code on how to make a chain of more than 65 physical coffee shops have the right metrics to attract venture capitalists. They just closed on a fresh $26.8 million amid a year where fundraising has taken a nosedive — even for companies with low overhead costs.
Blank Street was founded in 2020 by Vinay Menda and Issam Freiha who previously co-founded Reshape Ventures. Reshape invests in tech-enabled businesses that need real estate to scale, according to Crunchbase. The pair adopted their own thesis to try to fix the issue of consumers wanting better coffee but not wanting the higher prices usually associated with it.
Of course, Blank Street isn’t the first VC-backed coffee shop. Luckin, Blue Bottle and CafeX came before it. But for Menda and Freiha the key to doing this was to create a business model that leaned on scale — over everything else.