Blank Street Coffee, a new and fast-growing coffee chain, recently completed a $20 million funding round (following the $67 million raised in 2021) with investors such as Left Lane Capital, HOF Capital, General Catalyst, and Tiger Global. Founded in 2020 by Issam Freiha and Vinay Menda, the firm was initially set up in Brooklyn. In 2021, the company raised $67 million, including $25 million from the same investors. The firm further expanded by planning on opening 100 locations in New York and two-dozen shops in London by the end of the year. However, reality proved to be slower than their business plan.
I love that S.C.A.L.E. framework!! Also, it seems like they are closer to a human operated vending machine than they are a cafe, so I wonder if a line of coffee vending machines would beat them on both cost and convenience. For just cheap and easy caffeine dosing, I use gum (12.5 cents for a 50mg dose).
Don't forget about Luckin in China! They appear to be making a resurgence after their fraud "scandal" and are probably the ultimate example of coffee/tech-enabled/blitz scaling. Enjoyed the article as always Gad
I run two boutique cafes in Boulder, CO. I've been watching this story for a long time.
This is what happens when tech investors and tech founders meet the world of F&B.
Running scaled F&B is the farthest thing from a tech company that one can get. It is slow, involves humans and physical retail. None of those things scale fast in the United States or Europe as far as I know. The only place they scale quickly that I know of is China where labor is plentiful and there is a blue ocean for coffee (see luckin, etc.)
Beware rapid scale into a mature market. Customers are discerning and have a variety of choices across need sets. Mediocre hospitality / retail / product will not be tolerated.
A perfect side to my laborious hand-ground, hand-pressed espresso. Your class on scaling was transformative, and this article was a nice reflection!
Happily will agree with you and take my coffee break without venture funding & scale.
What other non-VC funding sources do you think that firms with growth aspirations like Blank Street’s should have been pursuing instead?
guess they are in dire need of product glow-up, that hits different with genZ.. beyond but around the coffee.. the way WiFi and not coffee stanned Sbucks .. perhaps a game u play only while you vape while sippin the coffee, lets disc. a 1-night date, or get slay at it:)