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Illustration: Megan Robinson/Axios

Ozy Media might have a securities fraud situation that has nothing to do with its infamous conference call.

Driving the news: Axios has learned that Ozy this year solicited prospective investors by saying Google Ventures has agreed to lead a new funding round, but three sources close to GV say that no such offer was made.

  • One source says that while GV and Ozy had exploratory conversations in the past, there were none in 2021.
  • GV declined comment, citing pending litigation.

We've previously questioned details of this "Series D" funding round, which Ozy CEO Carlos Watson is said to have told some employees had been completed. There are no relevant filings with the SEC, nor was there a press release or other public announcement.

What we know:

  • On Monday, a multi-family office for athletes and entertainers said in a lawsuit that Ozy and co-founder Samir Rao told it that "Alphabet or one of its Google affiliates" had agreed to lead the Series D with around a $30 million investment. It invested $250,000 in the round, following up on an existing $2 million investment, and now wants all of that money back.
  • On Tuesday, Watson told "The Breakfast Club" radio program that Google had made a written offer to invest $25 million.
  • An AngelList syndicate in June began soliciting over $100,000 in co-investment for the Series D round. Axios has obtained offering documents and other confidential communications saying that Google Ventures was leading at a $450 million pre-money valuation.
  • One of the syndicate documents included this remarkable footnote about Ozy: "The company could lose a ton of customers if sensitive data is lost or if something goes wrong in a high-profile manner."
  • The syndicate was fully subscribed in late June but kept the money in escrow as it waited on closing documents from Ozy that never came. Days after the scandal broke in late September, the syndicate emailed investors to say: "Due to recent developments surrounding the company and the composition of the round, we are unable to proceed with our investment into OZY Media. Your funds will be returned to your Angellist account promptly."
  • When I asked one of the syndicate organizers who had told him Google Ventures was leading the round, he replied: "Ozy, of course." He added that the syndicate's conversations were with Samir Rao, not with Carlos Watson.

Caveat: It is possible that GV did make the offer, and its lack of comment is more about embarrassment than litigation. But that would also have to mean that Ozy chose not to take a much-needed investment from a blue-chip investor.

For the record: Carlos Watson did not respond to Axios' requests for comment. His crisis PR rep, who had joined just days ago, is no longer working with Ozy. Former Ozy chairman Marc Lasry also declined comment, via a spokesman. Paul Weiss, the law firm hired by Ozy's board last week to launch an independent investigation, never launched the investigation and is no longer involved.

The bottom line: "Fake it 'til you make it" can work when it comes to social media marketing, but not when soliciting investment.

Go deeper

Ina Fried, author of Login
2 hours ago - Technology

Intel CEO sees making own chips as a matter of national security

Pat Gelsinger. Photo: Axios on HBO

Intel CEO Pat Gelsinger is putting the pressure on the U.S. government to help subsidize chip manufacturing, insisting the current reliance on plants in Taiwan and Korea as "geopolitically unstable."

Why it matters: There is bipartisan support for funding the domestic semiconductor industry, but Congress has yet to sign the check. The Senate has passed the CHIPS Act that includes $52 billion in semiconductor investment, but it has yet to pass the House.

Updated 2 hours ago - World

17 U.S. and Canadian missionaries kidnapped in Haiti

Haitian soldiers guard the public prosecutor's office in Port-au-Prince this month. Photo: Richard Pierrin/AFP via Getty Images

Children are among a group of 17 missionaries kidnapped in Port-au-Prince, Haiti, per a statement from Christian Aid Ministries Sunday.

The latest: "The group of 16 U.S citizens and one Canadian citizen includes five men, seven women, and five children," the Ohio-based group said. Haitian police inspector Frantz Champagne on Sunday identified the 400 Mawozo gang as the group responsible, in a statement to AP.

Ina Fried, author of Login
4 hours ago - Technology

Intel CEO wants to compete against Apple

Intel CEO Pat Gelsinger hasn't given up on the idea of the Mac once again using Intel chips, but he acknowledges it will probably be years before he gets that chance.

  • In the meantime, he is focused on powering Windows machines that give Apple CEO Tim Cook a run for his money.

Why it matters: In getting pushed out of the Mac, Intel not only lost a customer but picked up a new rival.