Specifically, the focus is on the firm's business practices and compliance with state regulations. Among the findings has been that it was possible to game the app - Marco - which delivered mandatory training. What was required had been 52 hours. Those training to become insurance agents could let the app stay on. That time was recorded as official training. Here is the latest coverage of the Zenefits' mess by Julie Bort at BusinessInsider.
Zenefits provides free software to small businesses for their HR function. It earns its revenue by selling health insurance. It has been discovered that many of those policies were sold by brokers without an official license.
The founder and CEO, Parker Conrad, was kicked out. The new CEO, David Sacks, has positioned and packaged himself as a Mr. Clean. But the issue is, of course, can he restore the reputation of the company.
Like Theranos, Zenefits had been a high-flyer. After only 2 years of existence, it had a valuation of $4.5 billion. Then it began to come undone. It missed its important revenue target: $100 million. Then the scandal hit.
Currently investors have become quite wary of startups in the tech sector.