Blackbird Labs Raises $24 Million for Restaurant Loyalty Platform

Blackbird Labs raised $24 million to scale its restaurant loyalty and membership platform.

The company announced the Series A round, led by a16z crypto, with participation from new backers Amex Ventures and QED Investors, Wednesday (Oct. 4) on X, formerly Twitter.

Today we are excited to announce the close of a $24M Series A financing round, led by @a16zcrypto, with participation from new investors Amex Ventures and @QEDInvestors. We are incredibly proud to count them as partners on our journey to build the future of restaurant tech.(1/4)

— Blackbird (@blackbird_xyz) October 4, 2023

“We believe every good guest should be treated like a VIP, which is why we’re building a platform that connects restaurants and their customers directly, in meaningful and ongoing ways,” Blackbird said on its website. “To do so, we’re using technology that identifies and rewards regulars, and partnering with some of the world’s best restaurants to bring these enduring relationships to life.”

The company was founded by Ben Leventhal, who is also the co-founder of food and drink magazine Eater and restaurant reservation platform Resy.

“The restaurant business model is broken,” Leventhal told TechCrunch Wednesday. “It can be really expensive to remain at the top of a sea of competition. Operational costs are also at an all-time high, and restaurants need revenue. There’s only two paths forward: creating new revenue streams or creating regulars who’ll want to come back.”

Leventhal added, per the report, that he had the idea for Blackbird during the pandemic after seeing the novel methods restaurants were using — such as selling pancake mix — to engage with diners.

“I was struck by the ingenuity of restaurants, who used their brands and audience to create sales streams that weren’t food,” Leventhal said, according to the report. “This led me to start thinking about other ways restaurants could combat the serious business challenges of declining margins and eroding direct customer relationships.”

The company’s funding round is happening as restaurants are increasingly seeking creative ways to entice diners, with many using subscription programs to incentivize customers to visit more often.

Taco Bell, for example, announced Tuesday (Oct. 3) that it is bringing back its Taco Lover’s Pass, offering loyalty members one free taco a day for 30 days after a $10 payment, with the passes available for purchase for two days.

In an interview with PYMNTS earlier this year, Daniel Shlossman, then chief marketing officer at Sweetgreen, said subscriptions must appeal to diners who are not already ultra-frequent customers to be cost-effective for restaurants.