MeToo? Israeli Start-up That Covered Up Sexual Harassment Raised $70m

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Hibob founder and CEO, Ronni Zehavi, March 15, 2012
Hibob founder and CEO, Ronni Zehavi, March 15, 2012Credit: Ofer Vaknin

Ronni Zehavi, founder and CEO of the high-tech start-up Hibob, can breathe a sigh of relief following a sexual harassment scandal reported by TheMarker in January. It’s still business as usual at the firm and the money keeps pouring in.

On Thursday, the media reported that Hibob had finished raising the enormous sum of $70 million, led by two new investors. One was Israel Growth Partners, whose founders are Haim Shani, a former Finance Ministry director general, and Moshe Lichtman, who formerly headed Microsoft’s research and development center in Israel (though the investment itself was led by Assaf Harel). The other new investor was the Australian company SEEK, led by Andrew Bassat.

Some of the company’s previous investors also contributed new funding. Among them were Bessemer Venture Partners (Adam Fisher), Eight Roads (Davor Hebel), Battery Ventures (Scott Tobin), Arbor Ventures (Melissa Guzy) and Entree Capital (Aviad Eyal). 

Following the new investments, the company’s estimated value ranges from $250 million to $300 million. The money was actually raised in August.

TheMarker’s investigative report from January noted that four different women had complained about being sexually harassed by M., the company’s chief revenue officer and one of its four top executives. The most serious complaint involved a sexual assault in which M. allegedly put his hand on an employee’s crotch. Less serious complaints included sexual humiliation in the form of an inappropriate joke about giving a junior employee a “golden shower” near the bathroom. Complaints about M. were found in all three Hibob locations, including New-York, London and Tel Aviv. 

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Hibob's office in Tel Aviv, January 11, 2020Credit: Rotem Lahav

Executives both within the company and outside it had heard about these incidents for quite some time, but nothing was done. Zehavi himself, TheMarker’s report noted, was informed about at least three of the complaints.

Yet only in one case did the company seek to investigate, as required by Israeli law, and that was only after the complainant, a junior employee, insisted on involving the company’s designated official in charge of preventing sexual harassment. She eventually left the company with a payment equivalent to three months’ salary and a signed document barring her from talking about what happened.

Zehavi decided to handle both of the other complaints – including the one where the employee showed him exactly how M. had put his hand on her crotch – by himself. In both cases, he told the employees, “If it won’t workout with M., then it won’t work out (for you),” or, “I’d be sorry to lose you.” Zahavi denies this account.

Executives who allow harassers to stay on are a problem that ought to receive public attention. But Hibob’s board of directors, which includes three respected investors from elite venture capital funds, has kept mum since the report appeared and they continued investing more money in the company. In this case, the board members are also the investors, and they seem to have prioritized their financial returns.

The company currently employs 170 people. A significant portion of its management left on their own accord around the time TheMarker’s report appeared (Hibob had been in contact with TheMarker in the month before it was published). 

The chief customer officer, who was also the person in charge of preventing sexual harassment, Dana Matalon Goren, left in December. The vice president for growth, Sharon Argov, left in January; and the chief product officer, Gilad Bonjack, left in February. 

The company also explained that M., the alleged harasser, had planned to leave of his own accord,  regardless of TheMarker’s report. Zehavi later said in an interview with Calcalist that “not one employee has left the company due to this affair.”

In a blog post that Hibob later removed from its website after the investigative report was published, but which can still be found in Google’s cache, the company advised other companies to act immediately against cases of sexual harassment rather than papering them over. Otherwise, their business could be destroyed, it warned. 

But that turned out not to be true. Hibob’s business has flourished over the last year. And it has numerous prominent Israeli customers, including Fiverr, IronSource, Riskified and Gong. It’s European customers include Revolut, Happy Socks and Monzo bank; and it’s American customers include VaynerMedia. Hibob also has strategic partnerships with Microsoft Teams, Mercer and Slack.

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