If you've ever walked into a Philz Coffee shop and thought it was a quaint little mom-and-pop, you wouldn't be the only one. Philz Coffee, a beloved institution in San Francisco, is known for its mismatched pieces of furniture and the diverse set of customers its draws in from its communities--you're just as likely to run into a businessman there as you are a local construction worker.

What you might not realize is that Philz Coffee, which indeed was at one point a family-owned shop, is now a quickly growing medium-sized business in the midst of a national expansion. This is why on Tuesday the company announced that it has raised $45 million as part of its latest round of venture capital funding.

"To expand, grow, open up things and hire people, it costs money," said Jacob Jaber, the CEO of Philz Coffee. "When you have something really special that you care about backed by your sincere ambition to grow it because you're so passionate about it, you want to make sure you have the resources to do that," Jaber said.

The company was founded by his father Phil--in immigrant from Palestine--in 2003 as a spin off from a corner store he'd run for decades. It has since grown into a chain with shops in four regional markets with more than 1,000 employees.

"And if you think about the coffee table, it's the original social network," Jaber said. "My dad grew up with that culture."

Be that as it may, it's probably not the kind of "social network" that venture capitalists usually have in mind when they make investments they're hoping will return many times over in a few years' time. But coffee in all its manifestations is almost as much a Silicon Valley obsession as technology.

Altogether, Philz Coffee has now raised $75 million and it sports stores all across the Bay Area, including on the campuses of major tech giants like Facebook and near the offices of aspiring startups that use their proximity to the shops as a tactic to attract new hires. Oakland rival Blue Bottle Coffee has raised even more money than Philz, lumping together more than $120 million in investments.

While tech startups turn to venture capital when they are ready to rapidly scale, Jaber said his company will be using the new wad of cash as a way to continue expanding one coffee shop at a time.

Boston is next on the road map, and Jaber said the company won't rush on to the next market until they nail down the welcoming and community feel that the Philz Coffee shop his dad originally opened is known for.

"We don't think in terms of numbers. We think in terms of success in every community that we're in," Jaber said. "We're expanding to Boston next year, and we want to do a good job there. If we do a good job, we want to maybe enter another city, and then, another one after that. It's really just one at a time."

Published on: Sep 14, 2016