Analysis of the Week: BlackBird - An a16z Backed ProjectThat Raised Over $24M to Revolutionize Restaurants with NFTs.
Hello everyone! In this new series, we will be examining intriguing projects through SWOT analysis. This approach enables us to swiftly review their strengths, weaknesses, opportunities, and threats,helping you formawell-informed opinion.
Our first episode will be dedicated to BlackBird.
Blackbird Labs raised $24 million in a Series A funding round led by Andreessen Horowitz (a16z). It's built on Coinbase's Layer-2 Base blockchain. Serving as a bridge in the hospitality sector,Blackbird's app utilizes Non-FungibleTokens(NFTs) to connect restaurants and customers in an innovative way. Having successfully forged partnerships with 80 impressive NYC restaurants, Blackbird has positioned itself as a potential game-changer in the dining industry. Furthermore, they've introduced a native token, denoted as $FLY. This token is anticipated to be listed in the future. Fully understanding their strategy and potential impact is beneficial before it goes public. Let's dive in to grasp the finer details of BlackBird'sbusiness model and its implications for the crypto and restaurant industries.
The founder, who once revolutionized the restaurant industry with Resy and later sold it to AMEX, definitely knows how to attract restaurants.
Backed by top VCs like A16Z Crypto, AMEX, USV, and others.
Significant capital raised, allowing room for strategic shifts if the initial plan doesn't succeed.
BlackBird's exploration of Real World Asset Tokenization could be an industry game-changer.
A robust network of influencers and top opinion leaders in the industry backing them.
Extremely oversaturated market. Thousands of loyalty programs exist, including those from credit cards, so competition is fierce.
Web3 nature. The problem of Web3 adoption is quite serious. There are few examples of crypto companies that made their solutions popularamong non-crypto users.That’swhyBlackBird integrates with Privy to simplify the wallet creation process, but that might not be enough to onboard Web2 users.
Regulation. The concept ofBlackBird’s native token, $FLY, potentially tokenizing restaurants and even enabling fundraising for new restaurants from loyal customers might not be warmly received by the SEC. With most of BlackBird’s network of restaurants located in the US, they will likely face regulatory complications.
Difficult international expansion. BlackBird'sbusiness is dependent on physical restaurants, challengingto onboard. They might stick to the US market but considering the US regulatory risks, it's better to be present in several key locations. Chains could be the solution for scaling to dozens of countries by partnering with restaurant groups worldwide. But that’s solvable by scaling through HoReCa chainsand become global at a reasonable cost,
Limited potential for the token due to modest utilities where rewards are paid in tokens to restaurants and users. Most users (who are already farming FLY) will sell them in the secondary market rather than using them inside the ecosystem.
Real World Asset Tokenization is likely to be a huge trend in the near future. Restaurants alone are a trillion-dollar market. If BlackBird can succeed here they could easily expand it to hotels, and revolutionize the industry as a result.
A strong team and legendary VCs backing the company open up almost endless opportunities to partner with large corporations, crypto market players, world-famous celebrities, and famous restaurants.
BlackBird could be a potential acquisition target for a company like Chase or AMEX in the next 1-2 years for 1 billion +. And to be host, Instead of pursuing a listing on platforms like Coinbase or Binance, which is obviously a plan, BlackBird might choose to expand its business, secure an additional funding round of around $50-75MM in the next 1-2 years, and then consider being acquired by a large entity like AMEX, Chase, or a similar industry heavyweight for around $2-$5 billion. This approach could effectively circumvent issues related to liquidity and most regulatory complications. Furthermore, it may potentially result in a higher return for all shareholders.
Regulation. If the SEC decides to stop BlackBird's operations, they can easily do that. The fact that BlackBird operates mainly in the US and most of their connections are there as well creates significant uncertainty.
Oversaturated market. There are already thousands of reward systems and loyalty programs. All of them spend big dollars on attracting customers. Hence, to compete, you have to spend a lot and figure out how to retain your users in the long term.
Thanks for reading this. We wish the best for BlackBird and hope they can successfully maneuver the obstacles on their way and build a successful business.
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