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 recently discerned the false declaration in the financial statements. In particular, the board and several vice presidents at the company lost faith in the ability of the CEO to respond to repeated requests to set up and support an internal financial body of the company as part of its growth.
“Consequently, the board and several senior managers opened an inquiry into its performance, from which there emerged a picture of callous and unethical conduct on the part of the CEO and fraudulent acts that caused damage to the shareholders and to the company. The CEO was confronted with the findings of the inquiry and left of her own free will. The situation is currently being studied in an internal investigation, and further steps are being considered.”
Insight Partners stated: “Insight takes pride in its support for and partnership with entrepreneurs and teams at their growth stages, and it has an unwavering commitment to the maintenance of the highest standards of ethics, responsibility, and leadership. Insight does not tolerate any finding of inappropriate behavior, fraud, or illegal activity in the investment fund or in any of its portfolio companies”
Published by Globes, Israel business news – en.globes.co.il – on June 25, 2023.
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