Ben Leventhal, a founder known for creating products that facilitate better connections between restaurants and diners, has secured $50 million for his latest venture, Blackbird Labs. This startup introduces a novel platform combining payments, loyalty, and blockchain technology aimed at enhancing customer retention for restaurants. Currently, approximately 1,000 restaurants have joined the platform, with plans for expansion beyond its New York headquarters to cities like San Francisco and Charleston, South Carolina. Leventhal describes Charleston as an ideal testing ground due to its vibrant dining scene.
The recent investment round is led by Spark Capital, with contributions from Coinbase Ventures, Amex Ventures, and Andreessen Horowitz, who previously supported Blackbird’s $24 million Series A funding. While the company’s valuation remains undisclosed, it was approximately $124 million at the last round, bringing total funding to $85 million.
Distinctively, Blackbird incorporates its Flynet payment service, leveraging Coinbase’s Base protocol. This allows diners to settle bills and redeem loyalty points directly through the Blackbird app. Although competing platforms exist, Leventhal insists the blockchain aspect may offer substantial advantages over traditional systems.
He notes that while blockchain isn’t strictly necessary, it opens up future opportunities in customer loyalty and restaurant ownership structures. Blackbird aims for a model where customers can maintain ownership of their profiles and, eventually, restaurant patrons can have a stake in the company itself.
Despite previous ventures in the restaurant space, such as the reservation service Resy—which was acquired by Amex—and the restaurant-focused site Eater, Leventhal remains passionate about further innovation in the industry. The restaurant landscape remains challenging, particularly with average profitability plummeting to below 5%, compared to around 20% in the early 2000s. This trend has heightened the pressures on restaurants amidst the rise of social media food trends, leading to increased competition and price sensitivity.
Leventhal points out a significant gap between the public’s enthusiasm for dining out and the overall profitability of the restaurant sector. He sees this as an opportunity for disruption. Arianna Simpson, a general partner at a16z, echoes this sentiment, suggesting that blockchain can enhance the economic models for restaurants, which often face high fees from tech platforms. She believes Blackbird’s model, designed for restaurants and diners to collaboratively own the network, has the potential to improve financial margins significantly. Blackbird is reportedly already helping its restaurant partners save 3-4% in payment processing fees, showcasing the practical benefits of its blockchain-based approach.
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