Billionaire Bill Gates‘ daughter Phoebe Gates and Phia co-founder Sophia Kianni reportedly pushed for features that could cause the shopping startup to claim affiliate commissions on sales it did not drive.
The founders “were aware” of the cookie stuffing practice since December, Bloomberg reported on Wednesday, citing people from the startup and messages posted on the company’s internal Slack channels.
Notably, the timeline contradicts a statement by Kianni and Gates to the publication on July 8 that they had only learned about the situation "within the last 24 hours" and blamed it on a software bug.
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What is Cookie Stuffing?
Phia is positioned as a "personal shopping assistant" helping users to discover the lowest prices on a wide range of apparel and fashion accessories. When a shopper uses it as an extension in browsers like Chrome and Safari as part of the online checkout process, they can promptly find discount codes and save money. Phia, in turn, earns a commission from the retailer for driving the sale.
However, Bloomberg reported in July that Phia’s browser extension was also designed to claim credit for a sale even when its product was never used, in a bid to increase commissions.
The latest report highlights that the founders knew about the features that placed a “cookie” (web tracking device) during the checkout process, without the user’s intent. According to the report, a lot of these purchases were made on the websites of major retailers like Nike Inc. (NYSE:NKE), Gap Inc. (NYSE:GAP) and Nordstrom.
Notably, Phia’s commercial partners prohibited the controversial practice, also known as “cookie stuffing.” The startup used three different cookie stuffing strategies, as per the report.
Affiliate network Impact.com, which distributes commissions to publishers like Phia, told the publication that the startup had been suspended from its marketplace after its initial report on the practice.
Phia, Nike, Gap and Nordstrom did not immediately respond to Benzinga’s request for comments.
Phia Suffers Revenue Decline
Phia, launched in April 2025, was intended to redefine online shopping. It raised $30 million in December from investors that did not include the Microsoft Corp. (NASDAQ:MSFT) co-founder. The funding round valued the company at $180 million, after its initial $8 million seed raise.
The Bloomberg report further stated that the “cookie stuffing” strategy accounted for 51% of the merchandise value of sales in June for which Phia claimed credit. It also stated that after disabling the features following the initial report in early July, the company’s average daily revenue dropped from about $80,000 to between $10,000 and $28,000.
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