Phoebe Gates and Sophia Kianni’s Phia raises $35M to ‘make shopping fun again’

In a bold move to transform the shopping landscape, startup Phia has raised $35 million in a recent funding round, led by Notable Capital with contributions from Khosla Ventures and returning investor Kleiner Perkins. Founders Phoebe Gates and Sophia Kianni, who are also best friends and former Stanford roommates, are currently navigating their entrepreneurial journey while confined to their homes due to a snowstorm in New York City. Despite the adverse weather, the Phia team remains committed, with several employees braving the elements to reach the office. The startup, which is just ten months old, has experienced remarkable growth, achieving an impressive 11x revenue increase since its inception and partnering with over 6,200 retail brands. Phia operates as both a mobile app and a web browser extension designed to help consumers find cost-effective alternatives to their desired products. For instance, if a shopper is eyeing a $200 dress from Anthropologie, Phia can suggest a similar item available on Poshmark for just $80. This approach not only emphasizes savings but also promotes sustainability, a cause that resonates with co-founder Kianni, a climate activist and former UN advisor. The startup's innovative model works similarly to affiliate marketing, earning a commission on sales made through the app. Kianni noted that many brands took a chance on Phia even when it had limited proof of concept, but the results are beginning to speak for themselves, with data showing substantial increases in average order values and customer acquisition rates. Social media plays a pivotal role in Phia's marketing strategy, with Gates and Kianni leveraging their combined following of over 2 million to promote their brand. They also host a podcast called "The Burnouts," where they share insights from their entrepreneurial journey and interview notable figures from various industries. Looking ahead, the founders aim to develop Phia into a comprehensive shopping agent, utilizing the new funding to attract top machine learning engineers. Kianni emphasized the importance of quality talent over sheer team size, stating that their focus is on building a knowledgeable workforce to achieve their ambitious goals. As they seek to create highly personalized shopping experiences, Phia acknowledges the need to handle user data responsibly. After a cybersecurity incident raised concerns about data privacy, the company took swift action to address the issue and has committed to being transparent with users regarding data collection practices. Gates and Kianni are optimistic about the future, envisioning a shopping experience that is not only efficient but also enjoyable. "We’re on the cusp of a completely new way of shopping," Gates remarked. With the integration of AI technology, they believe the cumbersome aspects of online shopping can be streamlined, ultimately making the process more engaging for consumers.