Hard to say exactly without being privy to their conversations, but the aggressive growth pressure that young companies with VC funding face almost always factors in somehow.
It's hard to truly expect companies to make the correct ethical decision in this scenario when the survival of founders is dependent on raising more and more money. The "grow now, profit later" model truly puts pressure on execs to take whatever they can. And in this case, they clearly thought either nobody would notice or care.
Who polices the VCs? It seems like they have no accountability, even financially speaking. If one investment fails they have nine more to reallocate towards, so to speak.
The market, obviously. If they invest in shit startups, then eventually they will lose all of their money.
Now the problem is, what if people still use something and give their money to even if that service/company is unethical?
Is it unethical to make very bad employment deals with people who have no better opportunities on the job market?
Well, now that's where again people come in. Some people say, no, because if they don't like the job, they can start their own company (ehm, ehm, maybe that's why we are here, too many people trying to start stupid companies built on almost stealing from each other). Some people say, fuck no, that's just a race to the bottom Somalia.
Some people pitch NIT (negative income tax, a form of universal basic income). Some full blown direct action style socialism/anarchism. ¯\_(ツ)_/¯
Technically LPs, but they're more-often-than-not large, faceless funds only interested in returns and mostly insulated from any blowback so moral considerations don't always concern them.
It's hard to truly expect companies to make the correct ethical decision in this scenario when the survival of founders is dependent on raising more and more money. The "grow now, profit later" model truly puts pressure on execs to take whatever they can. And in this case, they clearly thought either nobody would notice or care.