Phia, co-founded by Phoebe Gates and Sophia Kianni, secures $35M to revive shopping joy

Phia’s team is literally locked in — the startup is fully committed to building an AI shopping agent, but also, after a snowstorm swept through New York City, founders Phoebe Gates and Sophia Kianni are stuck in their apartments. So it’s unusual that when I talk to the former Stanford roommates and close friends, they’re not together, nor are they in the Phia office.

“We were like, ‘It’s fine, stay home.’ It’s dangerous. No one needs to go to the office,” Kianni told TechCrunch, laughing. But while she and Gates sheltered at home, many of their employees still made the trip in. “Our team is sending Slack photos right now… The entire porch is snow.”

That’s the life of a fast-growing startup. Phia is only ten months old, yet it just closed a $35 million funding round led by Notable Capital, with participation from Khosla Ventures and returning investor Kleiner Perkins.

It’s a quick turnaround. When I last spoke with Phia in October on the TechCrunch Disrupt stage, they were just one month removed from an $8 million round that included checks from celebrity investors like Kris Jenner, Sara Blakely, and Sheryl Sandberg. (Yes, Phoebe Gates is the daughter of Bill and Melinda; no, her parents are not funding her startup.)

“We’re at such a prime time of opportunity,” Gates said, explaining the new fundraise. “Commerce itself for consumers hasn’t really evolved in the last 30 years, and the chance to create a truly personalized, end-to-end shopping experience is here today.”

With hundreds of thousands of monthly active users, Phia has seen 11x revenue growth since launch and onboarded 6,200 retail partners.

Currently, Phia is a mobile app and a web browser extension that helps shoppers save money by showing them resale or second-hand alternatives to the products they’re looking for. If you’re about to buy a brand new Anthropologie dress for $200, for example, Phia could show you that the same dress is available on Poshmark for $80.

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There’s a sustainability angle to buying second-hand – Kianni is a climate activist and former advisor to the United Nations – but as a tech company, the founders understand that the way to build a customer base is simply by helping them save money. Beyond resale options, Phia might also recommend similar items from less expensive brands, which is where its partnerships come in.

“A lot of brand partners were really taking a chance on us and joining the platform when we had fewer proof points,” said Kianni. When brands make sales on Phia, the app gets a cut, similar to an affiliate model. “With new offerings we have, we can now show data like a 15% increase in average order value, 30% stronger new customer acquisition, or 50% lower return rates.”

Much of Phia’s success comes from its founder-led marketing tactics. As Gen Z digital natives, Gates and Kianni have amassed over 2 million followers across social media platforms. This includes their podcast “The Burnouts,” where they discuss their entrepreneurial journey and interview prominent figures in business and entertainment, from Bryan Johnson to Paris Hilton.

The Phia founders have ambitions to turn the app into what Gates calls a “holistic shopping agent,” which is why the company plans to use its new capital to hire top machine learning engineers.

“Our number one goal has always been bringing the best engineering talent specifically into our company, and having capital that can truly attract the best people,” Kianni said.

The current Phia team, all working out of the New York office (as long as there’s no massive snowstorm), has about twenty people — a small team for a company with somewhat broad ambitions to revolutionize commerce. But as Kianni puts it, “It’s not even about team size anymore. It’s about the quality of the talent you attract.”

To bring their ideas to life, they’ll need that kind of talent.

“Gone are the days when you’d go to a static HTML page that’s not personalized for you, your taste, your sizes, and what you already own in your closet,” Gates said.

As the company grows, she wants people to “go to Phia first, to really start that shopping journey from the top of the funnel — with your own personalized feed and outfit recommendations based on your current closet, or understanding what you might want to donate or sell.”

But to create such personalized experiences, Phia needs to collect user data, which is tricky to do in a secure way that keeps users informed about how much they’re sharing.

As reported by Fortune in November, cybersecurity researchers found a feature in Phia’s browser extension that could capture the HTML code of websites users visited while using the extension, essentially collecting data from their browsing history. The company removed the feature once notified and said in a statement to Fortune that “the extension previously logged webpage content to see if the site was a shopping destination,” and that Phia has “never in the past, or at present, stored this data.”

“We’ve always been extremely transparent with users about why we request certain permissions, and everything is displayed very clearly up front,” Kianni said. “In terms of how we build our tech and backend, we’ve always ensured all data is aggregated, anonymous, and used only to help users find the best products as efficiently as possible.”

Hopefully, that incident will be remembered as a growing pain for the startup, not an indicator of problems to come — because Phia is right that online shopping could use a makeover.

“I think that’s where AI agents play a huge role,” Kianni said. “All that cumbersome manual work can really be compressed, getting you the shortest path to the perfect item.”

“We’re on the cusp of a completely new way of shopping,” Gates added. “We want to make the entire ecosystem much more efficient and make shopping fun again.”