Phia Startup Scandal: Sustainability Claims Meet Alleged Affiliate Fraud in Gates-Backed Venture

A Bloomberg investigation has exposed questionable practices at Phia, the AI-powered shopping app co-founded by Phoebe Gates and Sophia Kianni. The startup, which markets itself as promoting sustainable secondhand shopping to reduce carbon footprints, allegedly used browser extension code to 'cookie stuff'—silently claiming affiliate commissions on purchases it did not influence. Internal Slack messages reportedly show the founders were aware of the issue for months and directed engineers to maintain the feature despite compliance concerns. Phia raised over $43 million at a $185 million valuation, attracting celebrity investors including Khloé Kardashian, Sydney Sweeney, Hailey Bieber, and Kris Jenner. The company's sustainability pitch echoes broader patterns where climate-friendly branding intersects with aggressive growth tactics. Kianni previously founded Climate Cardinals, a youth-led climate nonprofit, adding layers to the narrative of climate activism transitioning into commercial ventures. While Phia denied intentional misconduct and claimed a quick fix, the reports highlight risks of overstated environmental benefits in tech startups. This case underscores the need to scrutinize how climate and sustainability narratives are deployed in business models, particularly when tied to unverified operational claims.