Silicon Valley Favorite Philz Coffee Gulps Up $15 Million To Expand Nationwide

A lot of coffee shops would love to claim that they're not *just* a coffee shop. But that can actually be said about Philz Coffee. Philz has become an institution of sorts in its native San Francisco Bay Area, with many a tech industry product or deal being hatched over a cup of its strong brew. Product Hunt's founder Ryan Hoover says that the Philz in San Francisco's Civic Center neighborhood was his defacto office in the early days of building his company (and he still puts down a few cups of Philz every day.) The Startup Grind conferences always have Philz coffee on hand, with a Philz barista serving up custom-made cups to speakers backstage. There's even a Philz at Facebook's Menlo Park headquarters, reportedly at the request of Mark Zuckerberg himself. Now, Philz is gearing up to take its experience far beyond the Bay Area, and has raised a healthy amount of money to help do it. Philz Coffee has closed on $15 million in a new round of funding, the company tells TechCrunch. The funding, which is the company's Series B, was led by Summit Partners and brings the total amount invested in Philz to date to more than $30 million. Also participating in the round are an illustrious mix of angel investors including Cowboy Ventures, Crunchfund (which, for disclosure's sake, was founded by TechCrunch founder Michael Arrington,) Yahoo chairman Maynard Webb, Facebook exec Mike Schroepfer, former Apple and J.C. Penney exec Ron Johnson, actors Jonah Hill, Lawrence Bender, and Jamie Kennedy, and rapper and investor Snoop Dogg. In an interview this week, Philz CEO Jacob Jaber, the 27-year-old son of Philz founder Phil Jaber, told me that the new money will be used in part to help fuel the company's geographic expansion. Philz, which currently has 18 shops in the San Francisco Bay Area and one outpost in Los Angeles, plans to grow its footprint beyond California and open at least 10 more locations nationwide by the end of 2015. For Philz, that kind of expansion is not just a matter of setting up new shops. A big part of the draw of Philz is its unique experience: Each cup of coffee is made to order entirely by hand, by a barista who adds the milk and sweetener of the customer's choice, and asks customers to "take a sip, and let me know if it's perfect" while handing the cup over. Philz is not the fastest or cheapest cup of coffee you'll find, but it is one of the friendliest and most personalized. Scaling something like that is not as easy as simply snapping up a bunch of new real estate leases. Jaber says he's up for the challenge -- and that much like many technology firms, he sees happy and empowered employees as the key building block to successful growth. "We feel we have something special, and we want to share this experience with more people without diluting quality," Jaber said. "I talk about it as 'shareability' instead of 'scalability.' The way to do that is to recognize that the most important people in the company are the people behind the counter, and the store leader who is in charge of each store. We invest in them heavily and create a culture of ownership." Along these same lines, Philz has also established a business methods and values program Jaber calls "Philz University," which is an intensive training and development workshop for new employees and managers. "If we want to better other peoples' days as customers, we as individuals have to be better. We have to be happy outside and inside," Jaber says. "A lot of our staffers are young, in their 20s and 30s. We have an opportunity to help these people live a more fulfilling life, while they work for us, and beyond. We're in this for the long haul." While it all may sound a bit overzealous for a coffee shop, it also hearkens to tech industry traditions like Google's "Noogler" program for new hires. The hope is that someday, being an ex-Philz staffer could convey a type of expertise in retail and food service in the same way that being an alum of Facebook, Google, or Apple conveys a type of expertise in tech. It's clear that Philz has been influenced by its Silicon Valley neighbors -- the company certainly has big aspirations, and now it has big funding to match. It'll be interesting to watch it grow in the months ahead. And while I don't normally like to include company-produced videos, the one embedded below is worth sharing. It tells the story of Philz' early days through its charismatic founder Phil Jaber, and also captures the casual and funky NorCal vibe its cafes are known for:
Colleen Taylor

Colleen Taylor is a Writer at Gigabuzz, focused on covering early-stage startups, especially those with a technology focus and great perks.

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