LOS ANGELES Pinkberry Inc., operator or franchisor of 33 namesake frozen-yogurt shops, said it has received $27.5 million in expansion financing from Maveron LLC, a venture capital firmed co-founded by Starbucks Corp. chairman Howard Schultz.
Pinkberry founders Shelly Hwang and Young Lee retain "significant equity" in the Los Angeles-based chain and plan to devote some equity to an employee stock-option program, the company said.
At the core of Pinkberry's menu is its tangy, fat-free, Korean-style frozen yogurt. The frozen yogurt is offered in original and green tea flavors with a variety of toppings, such as fruit, nuts, chocolate chips and breakfast cereals. Shaved ice and smoothies also are on the menu.
The company operates three stores in the Los Angeles area and franchises 25 units in California and five in New York.
Pinkberry will use the funds from Maveron to open company-owned and franchise stores with the help of the venture capital firm's "brand-building leadership," Lee said.
Maveron, whose portfolio includes an investment in the Chicago-based Potbelly Sandwich Works sandwich chain, specializes in emerging companies and generally only holds a minority interest. The nine-year-old venture capital firm was co-founded by Schultz and Dan Levitan, a former investment banker who was involved in Starbucks initial public offering.
"Shelly and Young are wonderful people and visionary entrepreneurs with a great spirit who have created an amazing product in Pinkberry," Schultz said. "As a result, consumers return to the stores again and again while spreading an authentic word-of-mouth endorsement that's enabled the brand to become a cultural phenomenon."