Phoebe Gates’ Phia Raises $35M to Reinvent Shopping
▼ Summary
– Phia, a 10-month-old AI shopping agent startup, recently closed a $35 million funding round led by Notable Capital, following an $8 million round just months prior.
– The company’s core product is a mobile app and browser extension that helps users save money by finding secondhand alternatives or cheaper brand options for products they intend to buy.
– Phia has experienced rapid growth, achieving 11x revenue growth since launch and onboarding 6,200 retail partners, with revenue generated through an affiliate marketing model.
– The founders, who leverage their large social media following for marketing, plan to use the new funding to hire top machine learning engineers to build a more personalized, “holistic shopping agent.”
– The company faced a data privacy incident where its browser extension captured webpage content, a feature it removed, stating it never stored the data and emphasizing its commitment to aggregated, anonymous user data.
The landscape of online retail is poised for a significant shift, driven by intelligent technology that personalizes the entire consumer journey. Phia, a startup founded by Phoebe Gates and Sophia Kianni, is at the forefront of this change, recently securing $35 million in funding to develop its vision of an AI shopping agent. This substantial investment, led by Notable Capital with participation from Khosla Ventures and Kleiner Perkins, arrives just months after an earlier $8 million round that included notable backers like Kris Jenner and Sheryl Sandberg. The rapid fundraising underscores a strong market belief in Phia’s potential to redefine how people discover and purchase goods.
Currently, Phia operates as a mobile app and browser extension with a clear, value-driven proposition: helping consumers save money. The platform scans for resale or secondhand alternatives to items users are viewing. If someone is about to purchase a new $200 dress, for instance, Phia can instantly surface the same item on a platform like Poshmark for a fraction of the cost. This functionality has fueled impressive early growth, attracting hundreds of thousands of monthly active users and forging partnerships with over 6,200 retail brands. While the model promotes sustainable consumption, a passion for climate activist Kianni, the founders recognize that building a loyal customer base starts with delivering tangible financial benefits.
The company’s strategy extends beyond finding secondhand deals. Phia also recommends similar products from more affordable brands, leveraging its retail partnerships. Brands partner with Phia on an affiliate model, earning the startup a commission on sales it drives. Kianni notes that the platform can now demonstrate concrete value to these partners, such as increasing average order values by 15% or boosting new customer acquisition by 30%. This data-driven approach helps convert early adopters into long-term collaborators.
A significant driver of Phia’s user acquisition is the founders’ own social media presence. As Gen Z digital natives, Gates and Kianni have cultivated an audience exceeding two million followers across platforms. Their podcast, The Burnouts, where they discuss entrepreneurship and interview high-profile guests, serves as a powerful channel for authentic marketing. This founder-led outreach provides a substantial advantage in connecting directly with their target demographic.
The new capital injection is earmarked for a critical objective: recruiting elite machine learning talent. The founders envision Phia evolving from a cost-saving tool into a comprehensive “holistic shopping agent.” This future platform would act as a primary starting point for shopping, offering a personalized feed and outfit recommendations based on a user’s existing wardrobe, even suggesting items to donate or sell. Gates describes moving past the era of static, impersonal product pages toward a dynamic experience tailored to individual taste, size, and ownership history.
Achieving this level of personalization requires data, which introduces complex questions about privacy and security. The company faced scrutiny last year when cybersecurity researchers identified a feature in its browser extension that captured HTML code from visited sites. Phia promptly removed the feature, stating it was used only to identify shopping destinations and that no user data was stored. Kianni emphasizes the company’s commitment to transparency, aggregated and anonymous data usage, and clear user permissions. Navigating these concerns responsibly will be crucial as the platform expands its data collection to power more advanced AI features.
With a compact team of around twenty people, Phia is betting that the quality of its talent will determine its success more than its size. The founders are convinced that AI agents are the key to compressing the cumbersome, manual work of online shopping into a seamless path to the perfect product. They believe they are on the verge of introducing a completely new, efficient, and enjoyable way to shop, aiming to make the entire retail ecosystem smarter and more responsive to individual needs.
(Source: TechCrunch)
