Related Cos.' RSE Ventures is one of the more ambitious — and innovative — investors in growing restaurant brands.
— Jason Clampet
Billionaire Stephen Ross, the chairman of Related Cos. and owner of the Miami Dolphins, is betting that avocado toast and Australian coffee aren’t just fads.
RSE Ventures, a fund that invests on behalf of Ross, is leading a fundraising round in which it’ll acquire a significant minority stake in Bluestone Lane, said Nicholas Stone, founder and chief executive officer of the Australian-style coffee and cafe brand. Other new investors include March Capital Partners’ Jamie Montgomery. Returning backers include Barry Sternlicht’s family office JAWS and Jason Wright of Apax Partners.
The $19.5 million capital raising will value New York-based Bluestone, which is undertaking aggressive expansion plans, at about $100 million, according to people familiar with the matter, who asked not to be identified because the information isn’t public. Stone declined to comment on the company’s valuation.
“RSE has some amazing brands. They understand how to grow and incubate lifestyle businesses and we think they’ll be a great long-term, patient, partner who can take the company to the next level,” Stone said in an interview. “This capital gives us a chance to help our Australian-influenced coffee culture reach more customers and ideally become part of their genuine, daily escape.”
Bluestone’s earlier investors include David Barber, a co-founder of Blue Hill, the Michelin-starred restaurant, and Freemark Partners, the private investment firm for billionaire Howard Marks.
Bluestone has 30 stores, including locations in New York, New Jersey, Pennsylvania, California and Washington, D.C., and plans to open soon in Boston and Austin, Texas. Stone said the company plans to be operating at least 100 stores in the next three years after expanding into densely populated cities in Canada, the U.K. and Asia. It’s seeking to be the first premium, independent coffee brand that achieves global scale, he said.
Consumers have increasingly flocked to non-mainstream coffee brands, a trend that hasn’t been lost on some of the world’s largest food and beverage conglomerates. Last year, Nestle SA acquired a majority stake in Blue Bottle and in 2015, JAB bought Stumptown Coffee Roasters. La Colombe, which operates cafes and sells bottled and canned coffees, is exploring fundraising options including a stake sale, Bloomberg reported in April.
“Millennial customers are discerning and focused on more than simply a caffeinated product,” Stone said. That’s why Bluestone is focused on a providing a broader experience that includes service and aesthetic elements as well as freshly prepared food like avocado toast.
RSE, which was launched in 2012, invests Ross’s capital into private companies. It has backed restaurant brands such as Momofuku and Milk Bar in past years. In 2018, it continued to provide capital to reservations platform Resy and fast-casual concept &pizza, according to an RSE representative. It’s also known for investments in sports and media businesses such as VaynerMedia and the International Champions Cup. Matt Higgins, an RSE co-founder, said in a statement that he will join Bluestone’s board.
Bluestone is in talks to open stores in Related properties including Hudson Yards in New York and the Avery in San Francisco, Stone said. SoulCycle and Equinox are Related-backed concepts that have also found their way to properties owned by Related. Bluestone has already partnered with SoulCycle in locations such as Montauk in the Hamptons and with Equinox in Los Angeles and San Francisco.
©2018 Bloomberg L.P.
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