Blue Bottle Raises $25.75 Million, Including From High-Powered Friends

Few brands are as beloved in the tech community as the Blue Bottle Coffee Company, a nearly 12-year-old purveyor of gourmet brews made in painstakingly detailed fashion.

So perhaps it’s no surprise that some of the biggest names in Silicon Valley â€" including the Instagram co-founder Kevin Systrom and the Twitter co-founder Evan Williams â€" are contributing to the coffee seller’s latest fund-raising round.

Blue Bottle’s chief executive, James Freeman, confirmed to DealBook on Wednesday that his company had raised $25.75 million in a new round of financing. Besides Mr. Systrom and Mr. Williams, the investor group also included Google Ventures, True Ventures and “a group of mutual funds and investment vehicles” organized by Morgan Stanley Investment Management.

The fund-raising round â€" first reported by Kara Swisher on ReCode â€" had been in the works for only a few months, Mr. Freeman said. After all, Blue Bottle had raised just under $20 million in October 2012.

But the company’s chief financial officer, David Bowman, told him that a group of bankers from Morgan Stanley wanted to meet for three hours. At the time, Mr. Freeman was less than enthusiastic.

“I talked to David and said, ‘Jeez, three hours, really?’ ” he said, laughing. “But they were lovely and really knowledgeable. I really felt bad for thinking bad about them.”

At the meeting, the Morgan Stanley executives brought morning buns from Tartine, a popular San Francisco bakery, while Mr. Freeman and his cohort brought the coffee. What emerged from the talks was the sense that the company could raise enough money to finance its growth for the next four to five years.

Blue Bottle eventually brought in some investors from its previous fund-raising round as well, including the pro skateboarder Tony Hawk.

Why are technology types so interested in the company’s decidedly old-school coffee? Mr. Freeman guesses that the care and special attention to detail that his employees pay to the brewing process appeal to hacking culture. It’s an attraction that dates back to when Jack Dorsey all but set up shop at the company’s Mint Plaza location in San Francisco. (“I would have traded him coffee for a tiny sliver of Square,” Mr. Freeman joked.)

Here’s what True Ventures had to say about the fund-raising:

We believe Blue Bottle Coffee is at the forefront of a “consumer movement” or mega-trend in which consumers are moving to higher quality, artisanal micro-roasters of coffee, where quality, attention to detail, beauty and a distinctive experience are being sought over more mainstream alternatives.

While Mr. Freeman declined to comment on the privately held company’s performance, other than allowing that same-store sales are up, he said that the goal remained trying to bring Blue Bottle’s vision of gourmet coffee to more locations beyond its current lineup of 11 locations in the Bay Area and New York City.

Already, the coffee brewer has signed up seven or eight leases for locations this year, including in Los Angeles. And Mr. Freeman promoted what he said were improving standards for both coffee and employee services.

But can Blue Bottle grow anywhere near as big as Starbucks, which serves as a useful counterpoint? Mr. Freeman isn’t sure.

“Could we be the first 20-store chain, or 50- or 100-store chain that doesn’t suck?” he said. “What’s important to me is that the coffee gets better every year.”