General Catalyst, Tiger Global lead $25M investment into Blank Street’s micro specialty coffee shops

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Vinay Menda and Issam Freeha are two coffee-crazy friends who came to New York from Dubai and Lebanon to study at NYU and Columbia, respectively, and began researching the New York coffee scene.

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In America, he saw a coffee shop on every corner, but found the experience to be slower and more expensive: the shops were either a destination or a place to buy coffee to make at home, not a quality “grab and go”. ” for the operation, said Freiha. They noticed their friends going to various chain coffee shops for convenience or price point, but as college students, they couldn’t afford a daily $6 cappuccino.

Soon after graduating, he co-founded Reshape, a venture capital fund with $100 million in assets under management. He saw how successful high-growth, mobile-first, food-retail businesses were in Asia and saw an opportunity to replicate that street vending experience in the United States.

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Menda told Nerdshala, “There were a lot of cool businesses coming from Asia and skilled in real estate, which enables you to cut rents and save money and motivates clients to move in.”

The pair, who have now worked together for nearly seven years, founded New York-based Blank Street in May 2020 and three months later opened their first mobile coffee cart in Williamsburg in partnership with EV Foods at Wyeth Diner.

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Their idea was to shrink their business’s real estate to make it easier to control location, enable them to have multiple locations in one neighborhood versus one, and save money investing in other locations, such as lower product prices. They added some technology to improve the consumer ordering experience while building in quality, speed and convenience.

Vinay Menda and Issam Freiha, co-founders of Blank Street. image credit: empty street

Today, the company announced a $25 million Series A round led by General Catalyst and Tiger Global, along with additional strategic investors including Warby Parker founders Neil Blumenthal and Dave Gilboa, Harry’s founder Jeff Rader and Allbirds founder Joy Zwillinger. The company raised $7 million in seed funding earlier this year in its latest round.

Harvard Business School professor, Blank Street board member and General Catalyst advisor, Youngme Moon, said via email that he became aware of the company when he saw its mobile coffee carts popping up across the city. She observed that the company was “quickly establishing itself as the hottest new contender in New York’s high-growth specialty coffee race.”

“While they’ve quickly built an impressive coffee business, I’m re-imagining the entire micro-retail experience for Blank Street’s founding urban customers,” Moon said. “Blank Street competes in a crowded, competitive landscape, yet differentiates itself through an unparalleled customer experience by serving a high quality product through a digitally native, mobile vendor offering.”

The company now operates 14 locations in Brooklyn and Manhattan in a mix of 700-square-foot brick-and-mortar spaces and zero-emissions Mobile Street Cart, a micro-market for shops such as Parlor Coffee, Gertie Bagels, King Street, and more. Acts as a retail marketplace. Baking Company and King David Tacos. Each location impacted profitability within two months of opening, Menda said.

“The model that works is density,” he said. “To make a difference and impact on the consumer, we plan to have 100 locations and enough presence by 2022 so that people know the brand.”

The new funding will go towards retail expansion, vendor partners and technology development. Freeha expects to have three to five locations in every 20 neighborhoods, each with its own team and resources. Another focus will be on ordering, pick-up and a rewards program on the consumer app.

In addition, the company is now launching its “Powered by Blank Street,” a wholesale partnership agreement for local vendors to sell in new neighborhoods without having to find a storefront, provide their own labor or day-to-day sales. Manages day to day operations. King David Tacos is the first to use this new model, with its breakfast tacos being sold alongside Blank Street’s coffee and tea.

“We want to offer similar tools to power the experience of other brands, giving them the same infrastructure,” Menda said. “Consumers will be able to discover new foods and it’s also a great way for sellers to test out new and interesting products and get live feedback.”

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