Phia shopping app co-founders admit to misleading sales practices

Phoebe Gates and Sophia Kianni, co-founders of the Phia shopping app, have acknowledged that their app's sales attribution feature falsely credited sales for at least seven months. This misleading practice was revealed following an inquiry by Bloomberg, which led to the disabling of the feature that accounted for over half of the app's merchandise value. Internal communications indicate that the co-founders were aware of these deceptive practices for several months before taking action.

The feature in question drove approximately 51% of Phia's merchandise value in June 2026. It was only after Bloomberg's inquiries in July 2026 that the co-founders decided to disable the feature, which they publicly claimed was due to a bug.

Phia, an e-commerce startup co-founded by Gates and Kianni, has come under scrutiny for its sales attribution practices. The revelation of misleading sales figures raises significant ethical concerns regarding transparency in the tech industry. As e-commerce continues to grow, the accountability of founders and the integrity of their business practices are increasingly under the spotlight.

The timing of this incident is critical, as it coincides with a broader conversation about ethical practices in the startup ecosystem. Stakeholders, including consumers and investors, are likely to demand greater transparency and accountability from companies in the wake of this revelation.

The incident involving Phia serves as a cautionary tale for e-commerce startups about the importance of ethical practices. As the landscape evolves, companies must prioritize transparency to maintain consumer trust and avoid potential legal repercussions. The fallout from this situation may lead to increased regulatory scrutiny on e-commerce practices, impacting how startups operate moving forward.

Phia's reputation and future funding opportunities may also be at stake as the industry watches closely. Stakeholders will be keen to see how the company navigates this challenge and what steps it will take to restore credibility.