Coffee chain Blank Street raises funds from General Atlantic to fuel expansion and ice cream push
Latest fundraising values the six-year-old company at about $650mn as it aims to be ‘daily luxury brand’
Blank Street has raised $75mn from investors including private equity firm General Atlantic as the coffee chain pushes to expand on the US west coast and offer new products such as ice-cream in an attempt to become a “daily luxury brand”.
The six-year-old group, which launched as a single coffee cart in Brooklyn, is among a crop of fast-growing high street chains seeking to unseat established rivals such as Starbucks and Costa Coffee.
Blank Street has expanded to more than 100 stores, mostly in London and New York. The company is opening new branches in wealthy California enclaves, including Beverly Hills, West Hollywood and Malibu, according to co-founder Issam Freiha.
Blank Street has gained popularity with younger customers in particular for the popularity of its matcha drinks, which have proved a hit on social media.
“Matcha is a critical part of our menu on par with coffee. However, we don’t want to be defined by any single category,” Freiha said.
“Our vision is to build Blank Street into a well-rounded daily luxury brand, one that shows up for you in the morning with coffee or in the afternoon with matcha or little bites such as ice cream,” he added.
Freiha said Blank Street makes the majority of its sales in the afternoon and its fastest-growing time slot was after 4pm. “We’ve had to completely rethink our menu, hospitality experience, store design and operation flow,” he added.
Blank Street was valued at $500mn in a previous funding round last year, and the latest fundraising values the company at about $650mn including the money invested, said a person close to the company.
Some of Blank Street’s investors had hoped the new funding round could lift the company’s valuation closer to $1bn, but Freiha said such expectations had been incorrect.
The company’s backers include the consumer investor Left Lane Capital as well as the likes of General Catalyst and Tiger Global, firms which are better known for backing fast-growing technology businesses than café chains. Tiger has also invested in the bagel chain PopUp Bagels.
Other prominent investors have also turned to more traditional businesses with a physical presence this year as they seek sanctuary in assets which will not be impacted by AI.
Alongside its investment in Blank Street, General Atlantic also owns the Danish coffee, juice and sandwich group Joe & The Juice. The group has about $130bn of assets and has made other high-profile bets in the consumer sector, backing fitness brand Gymshark and non-alcoholic beermaker Athletic Brewing Company.
“We believe out-of-home coffee and matcha is a large, growing category, supported by durable consumer demand,” said General Atlantic. “We’re excited to partner with Blank Street’s talented founding team as they evolve and scale a distinctive brand and menu that continue to gain strong consumer traction across the US and UK.”