How can Blank Street be funded by venture capital?
But is his model what customers want?
In summer In 2020, a mint green coffee cart appeared in Williamsburg’s McCarren Park near the entrance to Greenpoint – directly across from a Starbucks.
It was cute and, to me at least, seemed like a new independent cafe. A few months later, when I saw that the cart’s parent company, Blank Street, had raised venture capital funds, I didn’t understand it. Why the hell does a coffee cart need venture capital funding? Even after finding out it was a string, the math just didn’t make sense to me. Venture capitalists generally don’t seem to like physical businesses. They also don’t like asset-heavy companies. It looked like both.
But Blank Street claims to have cracked the code on how to ensure that a chain of more than 65 brick-and-mortar cafes has the right metrics to attract venture capitalists. They just closed with a fresh $26.8 million in a year where fundraising has plunged, even for companies with low overhead.
Blank Street was founded in 2020 by Vinay Menda and Issam Freiha who previously co-founded Reshape Ventures. Reshape invests in tech companies that need real estate to scale, according to Crunchbase. The pair have adopted their own thesis in an attempt to solve the problem of consumers who want better coffee but don’t want the higher prices that are usually associated with it.
Of course, Blank Street isn’t the first cafe supported by VC. Luckin, Blue Bottle and CafeX preceded it. But for Menda and Freiha, the key to getting there was creating a business model that relied on scale — over everything else.
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