Joonko, a New York City-based startup founded in 2016, is facing imminent collapse following allegations of fraudulent conduct by its CEO, Ilit Raz. The company, which created an AI-powered job board to promote diversity in hiring, raised $25 million in funding from investors last fall. However, an internal investigation found that Raz had deceived investors by inflating the company’s business size. According to reports, Raz falsely claimed that Joonko was working with 150 companies when the actual number was much smaller. She allegedly submitted fake invoices, fabricated wire transfers, and created fake bank accounts to support her claims. The sophistication and audacity of her actions have left insiders stunned. Joonko’s board of directors released a statement stating that Raz had engaged in “egregious, unethical, and fraudulent conduct” that caused harm to the company and its shareholders. Raz has resigned in response to the findings. The board is currently investigating Joonko’s financial growth metrics over the past year to assess their accuracy. Joonko, which had touted its remarkable growth under Raz’s leadership, claimed to have more than 150,000 job candidates on its platform, with partnerships with major companies like Adidas, Nike, Intuit, PayPal, and American Express. The startup had raised a total of $38 million in funding, with last fall’s round led by Insight Partners. Insight Partners conducted a thorough due diligence process before investing but did not uncover any wrongdoing at the time. However, sources suggest that the funding round may not have taken place if the true extent of the deception had been known. Several top executives have also reportedly left the company in light of the allegations. Joonko’s board has lost confidence in Raz’s ability to develop and support an internal finance function and has expressed disappointment in the harm caused by her actions. The investigation into the matter is ongoing, and the future steps for Joonko are being considered.
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