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March 22, 2023

An Unexisting Estonian Startup Raises Funding From A Fraud Investment Fund

How a fraud conquered the press headlines

Hedonova, a hedge fund located in Paris, revealed last week that they had invested $16 million in Series A funding into a startup based in Estonia called Carbonomy. The startup, however, has never existed, nor has the fund.

Several news outlets, including Yahoo Finance and Investors Observer, covered the announcement after it was published on Cision PR Newswire. The press release outlines, "Carbonomy is a firm that helps farms become sustainable and increase their revenues by earning carbon credits."

Co-founder of Black Unicorn PR Mauro Battellini was alerted to the news by a client concerned about Estonian startup Carbonomy. Carbonomy's website directly copied text from Battellini's client's website and even mistakenly mentioned the name. It was discovered that Carbonomy had used the digital identity of eAgronom, a sustainable farming company based in Tartu, to present itself as an affiliate. However, eAgronom has no association with Carbonomy. Additionally, Carbonomy's website replicated eAgronom's website and used its name on the Terms and Conditions page. Carbonomy’s website is currently blank, but the domain name is active.

Battellini also questioned the reliability of the French hedge fund Hedonova, which was described in the Carbonomy story as being based in Paris. However, in other instances, Hedonova has been referred to as a California-based global fund with a CEO named Alexander Cavendish. Notably, there is no mention of Carbonomy on Hedonova's website or social media.

As per Hedonova's website, it is an investment firm that focuses on hedge fund investments in a range of assets, including art, wine, real estate, litigation, and startups. Among its portfolio of assets are equipment financing and peer-to-peer lending.

According to Mint's article, from 2022, the CEO of an alternative investment firm approached India's Economic Offences Wing with allegations that Hedonova was running a Ponzi scheme. In addition, the website claims that Hedonova's Chief of Investments, Neel Aryan Birla, is actually Anurag Bhatia, the founder of Minance, who has a history of fraudulent and criminal activity. In terms of schemes, Hedonova appears to have previous expertise and experience.

After Mauro Battellini exposed the situation, specific measures were taken. Carbonomy's website has been removed and is no longer listed on Crunchbase. Several news outlets have also deleted their coverage of the funding round. Nevertheless, the question remains: Why was the fraud not recognized earlier?

Elitsa Kaleva
Elitsa Kaleva
Content Writer at TechNews180
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