Joonko Team Ilit Raz Seated at Center –Company pic
Ilit Raz, the CEO and founder of Joonko, an Israeli startup that offers a human resources service that aids firms in reaching their diversity recruiting quotas, was forced to leave the firm under a cloud of fraud allegations. A number of other executives are also out at the company over what the Joonko board alleges was “egregious, unethical and fraudulent conduct” that it maintains “caused harm to the company and its shareholders.” The company is now in danger of closure.
So, what did Ilit Raz do? Well, Joonko alleges she deliberately inflated its number of customers saying that they were 150, when, in fact, the actual number was a fraction of that. In doing so, she may have committed an act of fraud when raising money for the firm.
Last September Joonko raised $25 million in a Series B round of funding led by Insight Partners. Joonko raised over $38 million to date. But this, apparently, was part of the problem.
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Globes cited one source as saying that Joonko’s last round of funding “probably shouldn’t have happened.”
“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,” said the Joonko Board of Directors in a stement.
“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.”
Joonko was founded in 2016 by CEO Ilit Raz. She explained how the company came into existence. Back in 2016, says Raz, she asked herself, “How can we improve the lives of women, minorities, and veterans in the workplace?”
