AI-powered diversity recruiting firm Joonko in chaos as CEO accused of ‘staggering’ fraud
New York City startup Joonko, which created an AI-powered job board to promote diversity in hiring, is in jeopardy after its CEO, Ilit Raz, allegedly deceived investors with an elaborate scheme to inflate the size of the company’s business. An internal investigation found that Raz had engaged in “egregious, unethical, and fraudulent conduct” that harmed the company and its shareholders, according to a statement from Joonko’s board of directors. Raz allegedly misled investors by claiming Joonko was working with 150 companies, when in reality the number was much smaller. The scheme reportedly involved fake invoices, fake wire transfers, and even fake bank accounts.
The allegations against Raz come after the company raised $25 million from investors last fall. The news of the alleged scheme stunned industry observers, who described the level of sophistication involved as staggering. Joonko’s email address appeared to be disabled, and Raz and other representatives for the company did not immediately respond to requests for comment.
Joonko gained attention last September when it announced a $25 million Series B fundraising round and said it planned to use the funds to expand its workforce at its Manhattan headquarters. The company claimed to have experienced significant growth under Raz’s leadership, with sales increasing by 500% for two consecutive years. Joonko’s platform boasts more than 150,000 job candidates and includes partnerships with major corporations such as Adidas, Nike, and PayPal.
Prominent venture firms who backed Joonko’s fundraising round last fall, including Insight Partners, Target Global, Kapor Capital, and Vertex Ventures, are believed to be conducting their own investigations into the situation. Insight Partners stated that it takes any findings of misconduct or unlawful activity seriously and is currently reviewing the scope of the situation.
Joonko, which has offices in New York City and Tel Aviv, has raised approximately $38 million in outside funding. Several top executives at the company have reportedly left in recent days. The board of directors stated that they are still investigating Joonko’s financial metrics to determine their accuracy.
In conclusion, Joonko, a startup focused on promoting diversity in hiring, is facing collapse following allegations that its CEO deceived investors and engaged in fraudulent conduct. The severity and sophistication of the alleged scheme have shocked industry insiders. Joonko’s investors and board of directors are currently assessing the situation and determining the next steps for the company’s future.
FAQs:
1. What is Joonko?
Joonko is a New York City-based startup that created an AI-powered job board to improve diversity in hiring.
2. What are the allegations against CEO Ilit Raz?
Raz is accused of deceiving investors by exaggerating the size of Joonko’s business. It is alleged that she misled investors about working with 150 companies when the number was significantly smaller. The scheme involved fake invoices, wire transfers, and bank accounts.
3. How much funding did Joonko raise?
Joonko raised $25 million in a Series B fundraising round last fall.
4. Who are Joonko’s investors?
Prominent venture firms, including Insight Partners, Target Global, Kapor Capital, and Vertex Ventures, backed Joonko’s fundraising round.
5. How has Joonko responded to the allegations?
Joonko’s board of directors conducted an internal investigation, which resulted in Raz’s resignation. The extent of the situation is still under investigation, and next steps are being considered.
6. How has the industry reacted to the allegations?
Industry insiders have been stunned by the severity and sophistication of the alleged scheme, describing it as staggering.
7. What is the current status of Joonko?
Joonko is on the brink of collapse following the allegations against its CEO. The company is facing uncertainty as investors and the board of directors assess the situation and determine the company’s future.
Joonko, an AI-driven diversity recruiting firm, experiences upheaval amid CEO’s alleged ‘staggering’ fraud allegations
Joonko, a New York City-based startup that used artificial intelligence to enhance diversity in hiring, is facing potential collapse following allegations that its CEO engaged in fraudulent activity to inflate the company’s business size. In a statement obtained by The Post, Joonko’s board of directors announced that founder and CEO Ilit Raz had resigned after an internal investigation revealed “egregious, unethical, and fraudulent conduct.” Israeli tech news outlet CTech, which initially reported on the allegations, stated that Raz deceived investors by claiming Joonko had partnerships with 150 companies, when in reality the number was much smaller.
According to a source familiar with the situation, Raz’s scheme involved submitting fake invoices attributed to real individuals at genuine companies, as well as fabricating wire transfers and bank accounts. The individual wrongdoing and the level of sophistication exhibited by Raz is described as staggering.
Despite multiple attempts to contact Raz and other representatives of Joonko, The Post has yet to receive a response. Joonko’s email address appears to be disabled as of Monday morning. In September, Joonko attracted attention with its Series B fundraising round, which raised $25 million and garnered coverage from publications such as Insider and TechCrunch. The startup intended to use the funds to expand its workforce at its Manhattan headquarters. A press release from September touted significant sales growth under Raz’s leadership, with a claimed 500% increase in sales over two consecutive years.
Joonko asserts that it boasts over 150,000 job candidates on its platform, with “partner companies” including major corporations like Adidas, Nike, Intuit, PayPal, and American Express. Insight Partners, Target Global, Kapor Capital, and Vertex Ventures were among the prominent venture firms that provided financial backing for Joonko’s fundraising round last fall, which totaled $25 million. Raz’s alleged misconduct is believed to have intensified following the completion of the fundraising round, as the company faced increased pressure to generate revenue. The board is currently investigating Joonko’s financial growth metrics from the past year to evaluate their accuracy.
Insight Partners, who conducted thorough due diligence prior to investing, including financial audits and background checks, did not uncover any irregularities, according to sources familiar with the matter. Insight Partners released a statement emphasizing their commitment to addressing any misconduct or unlawful activity involving their investments. They also mentioned that they are reviewing the situation and considering future actions.
Globes, an Israel-based outlet, reported that the internal investigation revealed information that should have prevented the funding round from taking place. Several high-ranking executives have reportedly departed from Joonko in recent days. The Post reached out to various Joonko investors and advisers for comment but has not received responses at the time of publication.
Established in 2016 and named after Junko Tabei, the first woman to conquer Mount Everest, Joonko positioned itself as a platform facilitating diversity, equity, and inclusion efforts in the workplace. The board of directors stated that they recently became aware of financial reporting misstatements and had lost confidence in Raz’s ability to develop and support an internal finance function. They characterized Raz’s conduct as unethical and fraudulent and confirmed her voluntary resignation. The investigation is ongoing, and the next steps are being considered.