The numbers at Phia looked impressive on paper: $8 million in seed funding in 2025, a $35 million Series A in January backed by Hans Tung, and a current valuation of around $185 million. Now a Bloomberg report has put those figures under a harsh light, finding that cookie stuffing accounted for more than half of the AI personal-shopping startup's revenue in June.
Cookie stuffing is an illegal practice in which tracking codes are placed onto users' devices without their consent, allowing a company to claim affiliate commissions it did not legitimately earn. The practice constitutes wire fraud under federal law.
Phia was founded in a Stanford dorm room by Gates and her roommate Sophia Kianni, officially launching in April 2025. The name is a portmanteau of the founders' names Phoebe and Sophia. Gates is the daughter of billionaires Bill Gates and Melinda French Gates. The company set up its office in New York City's Union Square after Gates moved there during her junior year, continuing Stanford coursework through an online night-school program.
The startup attracted a star-studded investor roster — Kris Jenner, Hailey Bieber, Sheryl Sandberg, and Spanx's Sara Blakely among them — on the promise of an app that could, as Kianni told Fortune's Term Sheet podcast, 'do all of our shopping for us... instantly and effortlessly, rather than all the manual price comparison and tab-opening we were doing on our computers.'
Beyond the fraud allegations, reporting by The Stanford Daily and a memoir by 2026 Stanford graduate Theo Baker have drawn attention to an off-the-record course Gates attended while at Stanford. The 10-week class, titled 'So You Think You Can Rule the World?' and known simply as 'Rule,' was not listed in the university's official course registration and required a referral to attend. Its instructor, Justin Lewis-Weber — a 2020 Stanford graduate and founder of insurance-technology startup Assured — selected only six women and six men per quarter.
Baker, who interviewed for the course in November 2022 while Gates was in the cohort but was ultimately denied entry, described it in his memoir as 'a secret society, a Skull and Bones for the aspiring tech elite.' According to Baker, Lewis-Weber taught students 'how to take advantage of others and find loopholes within rules.' A former student told Baker that Lewis-Weber preached that 'for a select group of people — those with increased agency — a great amount of value can be extracted from the people around you.'
According to The Stanford Daily, Gates used the 'Rule' network to recruit employees for Phia. A source who spoke to Fortune said they knew someone who completed the course and used skills from Lewis-Weber's lectures to deceive venture capitalists, without specifying exactly how.
CEO Times take: The Phia story is a case study in what happens when elite-network mystique substitutes for sound business fundamentals. Venture capital is supposed to price risk; when more than half of a company's reported revenue turns out to be fraudulently generated affiliate commissions, the due-diligence process has failed — and the investors who wrote the checks bear responsibility for that failure. Free markets work when information is honest. Cookie stuffing is not a gray area or a regulatory technicality: it is theft dressed in a term sheet. The market will price that accordingly, and the legal system should too.
