Source: Fortune.com
Summary
Phoebe Gates, daughter of Bill and Melinda Gates, cofounded the AI shopping app Phia after attending a secret Stanford course called “Rule,” which taught students how to manipulate power structures. Phia raised $35 million in Series A funding and is valued at $185 million. However, the company faces allegations of cookie stuffing, an illegal practice that falsely attributes sales to its platform. Phia claims it removed the feature in July, but internal Slack messages suggest founders were aware of the issue as early as December. A spokesperson said the company is reviewing transactions and hiring a compliance officer.
Our Reading
The numbers tell one story.
Phoebe Gates, daughter of billionaires, built a $185 million company after a secret Stanford class.
Phia’s founders allegedly knew about fraud for months before publicly addressing it.
Internal messages show encouragement of questionable tactics.
Startup success often comes with hidden costs.
Author: Evan Null
How Gates Applied the Course to Her Advantage
Gates used her connections from the secret Stanford class to recruit employees for her startup, Phia. She and her roommate, Sophia Kianni, founded the app in a dorm room and launched it in 2025. Gates moved to New York while continuing her studies online. Phia’s AI shopping app quickly gained traction, raising $8 million in seed funding and later $35 million in Series A. The app’s name is a blend of the founders’ names, and Gates is the daughter of Bill Gates and Melinda French Gates.
Phia’s Controversy
Phia now faces accusations of cookie stuffing, an illegal practice that falsely attributes sales to its platform. A Bloomberg report found that over half of Phia’s revenue in June came from this fraudulent method. The company claims it removed the feature in July, but internal Slack messages suggest founders were aware of the issue as early as December. A spokesperson said they are reviewing transactions and hiring a compliance officer.
Internal Slack Messages Reveal Concerns
Internal Slack messages obtained by Bloomberg show that Phia’s founders were aware of the cookie stuffing issue. Cofounder Kianni suggested a program that dropped cookies every time users closed a popup, regardless of app usage. A coworker warned that this would violate Google’s Chrome Extension policy, but Kianni responded that users could be blamed for complaints. Gates also encouraged team members to implement the practice, writing, “Whatever we can do to keep these cookies dropping will be amazing.”
Legal and Financial Fallout
If proven that both Gates and Kianni knew about the fraud for at least seven months, criminal intent could be a factor in court. The wire fraud scandal could lead to more than just a revenue drop for Phia. The company is now under scrutiny, and the legal implications could be severe. The incident highlights the risks of rapid growth and the importance of ethical business practices in the tech industry.
Reputation and Public Response
The controversy has sparked public backlash, with many questioning the ethics of Phia’s practices. Gates, known for her family’s legacy, now faces scrutiny over her role in the company’s operations. The scandal has also raised concerns about the influence of elite networks and the potential for unethical behavior in high-profile startups. As Phia works to regain trust, the incident serves as a cautionary tale for other young entrepreneurs.
