— By Kevin Montgomery (@kevinmonty) |
Whenever I read about local coffeeshop news in TechCrunch, I generally expect the news to not be good. But in Philz' case, it might not actually be so bad.
According to TechCrunch, Philz raised over 3.75 million cups of Tesora worth of money to expand the 13-shop operation outside the Bay Area:
Today, Philz Coffee is adding some growth capital of its own. Although the company isn’t ready to disclose the exact amount, [Phil] Jaber says that the company has raised an eight-figure round that’s on the lower end of the spectrum. From what we can gather from sources, it appears to be in the $15 to $25 million range. The lead investor in the round is Summit Partners, and as a result of the firm’s investment, Summit Managing Director Greg Goldfarb will be taking a seat on the startup’s board of directors.
It's been a helluva story for Phil and his emerging startup. Founded 25 years ago as a modest corner store at 24th and Folsom, he spent decades perfecting his secret coffee blends. Then in 2003, after decades of limited growth in the corner store market, Phil pivoted the company launched Philz Coffee in the same location. Philz soon brought on rockstar Silicon Valley CEO “his son”, opened over a dozen more stores, and cemented partnerships with Virgin America and Facebook, giving the small neighborhood coffee house the totally reasonable $40-70 million dollar valuation they have today.
Of course, one of the best features of Philz was never the coffee itself, but rather his shop felt like the kind of welcoming, worn-in den that only an old artist would open. How they'll be able to replicate that freewheeling culture which they've become know for across hundreds of stores remains to be seen.
Comments (22)
Do they sell La Boulange pastries?
Wow!
I hope they snort every last cent of that.
That place is completely insufferable.
There’s not a lot going on for Philz outside of the 24th street location (which I love). Every other one (in the city, I don’t know about Berkeley or what ever) is a brown leather colored room of meh.
Not sure how they’re going to spend that 15 million.
Wewere wondering that ourselves,will their cahin be modeled after Van ness? A wannabe Peets or Starbucks or the 24th location and its desire to be Coffee to the people…Hmmmm. either way,the coffee stinks.
But my wife likes the coffee and she knows what she likes and will go to any Philz anywhere with blind loyalty. They have blown up - deal with it.
Don’t get it twisted, I also love Philz and don’t see myself losing any respect/loyalty for the 24th location anytime soon (unless it becomes something like The Original Starbucks, of course), I’m just not sure how they’ll manage to scale the business to something worth *that* much money unless they start manufacturing a product that’s “the Sodastream for drip coffee” or something.
Nice. Kevin’s key word to me is “scale.” In economies of scale, you have to sacrifice quality, especially when short-term investors expect profits to increase each quarter.
As used in the economics textbooks, economies of scale does not mean that one has to sacrifice quality.
“Of course, one of the best features of Philz was never the coffee itself” Thank goodness you said it…,
we’ll have to agree to disagree on this one. I like Philz coffee more than any other SF roaster…I’ll drink Four Barrell, Sight Glass, etc, but it just tastes too bitter to me most of the time.
Hope to see you this weekend.
Would a shit sandwich taste better if they were made “One at a time” Just saying…. Prob not sense the ingredients are still shit.
PD, I already loved you, but I love you so much more now.
Philz is the Cafe Gratitude of coffee shops.
Maybe they can now finally afford some non-disposable ceramic mugs?
I’ve asked them about that before. The health department won’t let them use non-disposable mugs for in-store use because they don’t have an adequately sized dishwashing facility. Lame, I know.
But they do give you a discount if you bring your own!
It feels like everyone is making big money but me.
Hope Philz can make this work. I’m a big fan of their coffee, and have enjoyed both the 24th St. and 4th St. locations. Hope their rollout focuses more on making their coffee widely available to other outlets, both wholesale and retail (including to independent coffee shops) rather than increasing the number of Philz locations beyond the Bay.
They’re already the official coffee of Virgin America, what else do they think they need?
Can’t wait for the day when I can buy a mission style burrito AND cup of coffee in Germany.
Pretty soon everybody will be making huge salaries, swinging incredibly lucrative deals and getting around on a charter bus!
can someone please tell me what the fuck is not a “startup” these days? I still don’t get the use of the term “startup”. Philz coffee: a 25 year old company with 13 locations, $15-25 mill in growth capital and a valuation of $40-70 million and have sold 3.75 million cups of Tesora. Sounds like a small empire that wants to be a big empire: like Pete’s, Tully’s, or even starbys. Can some explain how they are a “startup”? We can all agree that this area is completely beat and people need to move on. Please don’t exacerbate the problem by fucking calling everything a fucking “startup”.