The founder, who created his own name to help restaurants connect better with diners, raised $50 million, his latest startup.
Blackbird Labs has built the Payment-Loyalty Meat Blockchain Platform to grow its business repeatedly, while reducing some of the frictions around transactions. Around 1,000 restaurants have now signed up, and CEO Benleventhull said Blackbird is planning to launch its latest product, the latest product, to call on its latest product, Blackbird Club, to expand to markets outside of Charleston in New York (its headquarters), San Francisco and South Carolina.
Why Charleston, do you ask? “Charleston punches above the class,” Leventhull said in an interview with defy. “It’s a great restaurant town for its size.” It also appears to be on par with Blackbird, the Meta’s New Zealand equivalent, and Reventhull calls it a “good test market for us.”
New backer Spark Capital leads this latest round with participation from Coinbase Ventures, Amex Ventures and Andreessen Horowitz. Three investors who supported Blackbird with a $24 million Series A in 2023. The startup has raised $85 million so far.
Coinbase and Amex are the strategic names for that list.
Amex acquired Resy, a reservation platform previously founded by Leventhal in 2019. The two companies (Resy and Blackbird) are not currently integrated, but “it’s fair to us,” says Leventhal. Prior to Resy, it was founded by third restaurant-centric startup Leventhal, and Food Blog Eater was also acquired. It is currently part of Vox. There are no plans as to how or whether it leads to a partnership deal.
Blackbird describes Flynet Payment Service as a Layer 3 transaction protocol built on the basis of Coinbase. Diners can use it to pay for meals at the table via the Blackbird app or redeem loyalty points when visiting the restaurant.
defy Events
Berkeley, California
|
June 5th
Book now
It’s worth asking if blockchain is a necessary part of the mix. The market includes more traditional financial structures, including Punchh, Toast, Lightspeed, and more, which are directly competitors to Blackbird.
“I don’t necessarily think that it needs to be built on a blockchain,” Leventhull said. “Visa’s network was created more or less using the same principles that we use for Flynet. There was clearly no blockchain.”
However, Leventhal also pointed out that “there are some important opportunities over time and I believe that those opportunities are based on being chains.” These include how Blackbirds and restaurants hold customer profiles and activities, he said. “Consumers can continue to own that profile,” Leventhull told defy. It also relates to how Blackbirds envision their involvement with restaurants, he said: each restaurant’s customers will ultimately become Blackbird shareholders.
With two startups dedicated to the consumer-oriented aspects of restaurant trade, you might think Leventhull might have filled the business. After all, he’s still more hungry.
Although owning restaurants has long been a challenging business, the economy and changing consumer habits have overwhelmed the world of restaurants, especially in the last few years.
Leventhal cites figures from the National Restaurant Association, which states that restaurants have average profitability in recent years is less than 5% compared to an average of around 20% in the early 2000s.
Platforms like Instagram and Tiktok are turning the world into armchair foodies and producing a large number of people who flock to the virus to the latest and coolest cafes, but they do this at a time when price sensitivity is rapidly declining. These are areas that become even more severe only if the US is actually really locked up on the latest tariff hike.
“In the restaurant industry, there is a disconnect between the popularity and strength of consumer love for restaurants and, ultimately, the profitability of the industry,” he said.
Of course, that disconnect means opportunity in the startup’s mindset.
“The restaurant industry is made up of millions of local small business owners around the world,” A16Z general partner Arianna Simpson told defy via email. “These restaurants are at the mercy of high-tech platforms where you can claim a percentage of the restaurant’s margins that are growing.”
Simpson believes this is where blockchain can play a role in particular. It improves its margin structure. “Ben’s vision is for networks owned by restaurants and diners themselves. This is something that only enables blockchain,” she said, adding that Blackbird has already saved restaurant customers 3-4% on payment processing costs.
