In a significant move for the future of retail, Phia, the AI-powered shopping startup founded by former Stanford roommates Phoebe Gates and Sophia Kianni, announced a substantial $35 million Series A funding round on October 13, 2025. This investment, led by Notable Capital with participation from Khosla Ventures and Kleiner Perkins, signals strong confidence in the company’s mission to fundamentally reshape how consumers discover and purchase goods online. The funding arrives just ten months after Phia’s launch and follows an earlier $8 million seed round, highlighting the startup’s rapid trajectory in the competitive e-commerce landscape.
Phia AI Shopping Agent: Building a Personalized Commerce Future
Phia operates primarily as a mobile application and browser extension. Its core function is to act as an intelligent shopping assistant. The platform analyzes a user’s browsing behavior and shopping intent. Subsequently, it surfaces cost-effective alternatives. These include second-hand options from marketplaces like Poshmark or similar items from less expensive brand partners. For instance, a user considering a $200 dress from Anthropologie might receive a notification showing the same dress available for $80 on a resale platform. This model provides immediate consumer value through savings while promoting sustainable consumption—a key pillar for co-founder Sophia Kianni, a noted climate activist and former UN advisor.
The company has demonstrated impressive early metrics. It reports hundreds of thousands of monthly active users and has onboarded over 6,200 retail partners. Furthermore, Phia claims an 11x revenue growth since its inception. The business operates on an affiliate marketing model. When a sale occurs through a Phia recommendation, the company earns a commission. Kianni states the platform can deliver tangible results for brands, including a 15% increase in average order value and 30% stronger new customer acquisition.
The Founders’ Vision and Rapid Growth Trajectory
The story of Phia is deeply intertwined with its founders. Phoebe Gates and Sophia Kianni leveraged their Gen Z digital native status and pre-existing social media influence to bootstrap the company’s initial growth. Together, they command an audience of over 2 million followers across platforms. Their podcast, “The Burnouts,” serves as a marketing channel and a platform for discussing entrepreneurship. This founder-led marketing provided a significant user acquisition advantage, bypassing traditional costly ad spends.
From Seed to Series A: A Timeline of Strategic Funding
Phia’s funding journey illustrates calculated growth. The startup secured an $8 million seed round in late 2024. That round included investments from high-profile figures like Kris Jenner, Sara Blakely, and Sheryl Sandberg. The recent $35 million Series A, closed just months later, is earmarked for specific technical expansion. The primary goal is recruiting top machine learning engineering talent. This focus aims to transform Phia from a recommendation engine into a “holistic shopping agent.” Gates envisions a future where users start their shopping journey directly within Phia. The AI would provide personalized feeds and outfit recommendations based on a user’s existing wardrobe and stated preferences.
The founders are clear about their market opportunity. “Commerce itself for the consumer hasn’t really been adapted in the last 30 years,” Gates told Bitcoin World. “The opportunity to make a truly personalized, end-to-end shopping experience is today.” This vision requires sophisticated AI capable of understanding nuanced personal style, size, and inventory across thousands of retailers—a complex technical challenge the new funding aims to solve.
Navigating Data Privacy in Personalized AI Commerce
Phia’s ambitious model relies heavily on user data to function effectively. This dependency introduces significant privacy and security considerations. In November 2024, a report by Fortune highlighted a security concern. Cybersecurity researchers identified a feature in Phia’s browser extension that captured HTML code from visited websites. The company stated this was to identify shopping destinations and immediately removed the feature upon notification. Phia emphasized it never stored the data.
Kianni addressed these concerns directly. “We always are extremely transparent with users about the reasons why we are requesting certain permissions,” she said. The company asserts all collected data is aggregated, anonymized, and used solely to improve product matching. For Phia, balancing deep personalization with robust privacy protections remains a critical ongoing challenge. Its long-term trust with users depends on navigating this balance successfully.
The Competitive Landscape and Future of AI Shopping Agents
Phia enters a crowded field of e-commerce platforms and browser tools. However, its positioning as a Gen Z-founded, AI-native “agent” distinguishes its approach. The company argues that current online shopping involves cumbersome, manual search across fragmented sites. Kianni believes AI agents can compress this workflow. “All this cumbersome, manual work really can become compressed,” she explained, leading users on “the shortest path possible to the perfect item.”
The new capital will fuel an aggressive hiring plan for a team currently around twenty people. “It’s not even about team size anymore. It’s just about the quality of the talent you’re attracting,” Kianni noted. This talent will build the complex algorithms needed for true wardrobe integration and predictive style assistance—features that go beyond current price comparison tools.
Conclusion
The $35 million investment in Phia’s AI shopping agent represents a major bet on the future of personalized, AI-driven commerce. Founded by Phoebe Gates and Sophia Kianni, the startup combines a compelling sustainability angle with a direct value proposition of consumer savings. Its rapid growth and high-profile backing underscore a market readiness for innovation in the stagnant online shopping experience. The company’s success will hinge on its technical execution, its ability to scale personalization while safeguarding user privacy, and its vision to make the entire shopping ecosystem “more efficient and fun again.” As AI continues to transform industries, Phia’s journey will be a key case study in whether intelligent agents can truly revolutionize how we buy.
FAQs
Q1: What is Phia and what does it do?
Phia is an AI-powered shopping assistant available as a mobile app and browser extension. It helps users find cheaper alternatives for products they want to buy, including second-hand options and items from less expensive brands.
Q2: Who founded Phia and what is their background?
Phia was founded by Phoebe Gates and Sophia Kianni, former Stanford roommates. Gates is an entrepreneur, while Kianni is a climate activist and former advisor to the United Nations. Both are Gen Z digital natives with significant social media followings.
Q3: How much funding has Phia raised?
As of October 2025, Phia has raised a total of $43 million. This includes an $8 million seed round and a recent $35 million Series A round led by Notable Capital.
Q4: How does Phia make money?
Phia operates on an affiliate marketing model. When a user makes a purchase through a Phia recommendation, the company earns a commission from the retailer or marketplace.
Q5: What are the main challenges facing Phia?
Key challenges include building sufficiently advanced AI for holistic shopping assistance, scaling user growth beyond founder-led marketing, recruiting top machine learning talent, and maintaining rigorous data privacy standards while collecting the user data necessary for personalization.
Q6: What is Phia’s long-term goal?
The founders aim to transform Phia into a “holistic shopping agent” where users begin their entire shopping journey. The vision includes personalized feeds and outfit recommendations based on a user’s existing wardrobe and style preferences.
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