An internal examination at startup company Joonko, a diversity recruitment platform founded by Ilit Raz, has raised suspicions that company misreported its customer numbers. According to assessments by several senior managers at the company and its investors - among them the Insight and Target Global funds and Udi Netzer - the company has fewer customers than it reported. After being confronted with the findings of the examination last week, Raz decided to step down as CEO and leave the company immediately. Today, many of the employees were summoned to hearings, and the company continues to employ some of the senior managers who are assisting the investigation team. Raz did not respond to an approach from "Globes".
Joonko has raised $35 million to date. Its latest round was in September 2022, and was led by Insight Partners, at a valuation of $89 million, according to venture capital database PitchBook.
Sources close to the company say that, on the basis of the figures that emerged in the investigation, the funding round "probably shouldn’t have happened", but qualified this by saying that the examination was still continuing and that there might be further findings.
Joonko’s board of directors said in a statement: "The company was recently made aware of misstatements in the financial reporting of the company. Specifically, the board and other executive officers of the company lost confidence in the CEO’s ability to deliver on repeated requests to develop and support an internal finance function as part of the maturation of the company and its business. As a result, the board and other executive officers of the company carried out an extensive review of the CEO’s performance.
"The CEO was found to have engaged in egregious, unethical and fraudulent conduct, which caused harm to the company and its shareholders. The CEO was confronted with the findings of the investigation, and she voluntarily resigned in response. The extent of the situation remains under investigation and next steps are under consideration."
Insight Partners stated: "Insight takes pride in being a supportive partner for entrepreneurs and leadership teams on their growth journey and has an unwavering commitment to upholding the highest standards of ethics, accountability, and responsible leadership.
"Insight does not tolerate, and our investors expect us to take seriously, any findings of misconduct, deceit or unlawful activity at our firm or any of our portfolio companies."
Published by Globes, Israel business news - en.globes.co.il - on June 25, 2023.
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