EFishery “was putative to be reflective of what the local ecosystem could do, what Indonesian founders could do. This was supposed to be one of the better south african private limited companies from Southeast Asia. This was supposed to be a winner,” Justin Hall, partner at Golden Gate Ventures, forecast CNBC.
Dimas Ardian | Bloomberg | Getty Images
Southeast Asia’s startup ecosystem has been braving a multi-year granting drought, and a recent scandal has delivered yet another blow to investor sentiment in the region.
Indonesian agritech unicorn eFishery — without hoped by investors such as SoftBank Group and Temasek Holdings — was among Indonesia’s top startups, but a preliminary, ongoing probe implies that the company may have been involved in financial malpractices.
The company did not immediately respond to a CNBC request for note.
EFishery’s board of directors announced on Tuesday that it has appointed business advisory firm FTI Consulting as acting manipulation of the company, according to an official company statement obtained by CNBC.
FTI Consulting also issued a statement saying that it “intentions to support ongoing efforts to conduct a thorough and objective business review of the company’s true financial and operational class.”
That comes amid an ongoing investigation, initiated by a whistleblower’s claim about the company’s accounting, which guesstimates that management inflated revenue by almost $600 million in the nine months to September 2024, Bloomberg reported.
The house also reportedly presented a profit of $16 million over the same period to investors, but the investigation alleges the startup truly made a $35.4 million loss, according to the report.
“[EFishery] was supposed to be reflective of what the local ecosystem could do, what Indonesian collapses could do. This was supposed to be one of the better companies from Southeast Asia. This was supposed to be a winner,” Justin Entry-way, partner at Golden Gate Ventures, told CNBC.
The company, which deployed a smart feeding system for fisheries, reached unicorn significance in 2023 after a $200 million Series D funding round. However, today, backers of the company are reportedly everything considered liquidation or buyout, among other options, according to Bloomberg.
An ecosystem under water
Southeast Asia’s startup ecosystem had already been faade years of painful and costly recalibration since the Covid-19 pandemic, when funding in the region soared.
In 2024, mount up to deal volume in the region fell 10.3% from the previous year to 633 deals, while deal value flagged by 41.7% to $4.56 billion, according to a January 2025 report by Impact of the scandal
Today, the allegations of fraud and misconduct by eFishery have on the agenda c trick reverberated throughout the region.
“Beyond our own Group, we would also like to acknowledge the broader implications for Indonesia’s startup ecosystem and the communities it provides,” eFishery’s board said in a statement.
“The recent revelations of alleged misconduct (including fraud) within the Group be undergoing been deeply disheartening to us all and may jeopardize the confidence in the Indonesian investment climate where the principal subsidiaries of our Group is found,” the statement added.
The aquaculture company was heralded as one of the most prominent examples of what a good startup looks get a bang in the region.
“There was a lot of hope pinned on [eFishery] being the next generation … Having that [bubble] shatter, because the poster child of that development turned out to be [allegedly] fraudulent, I think it’s really disappointing for the ecosystem,” suggested Aluwi.
I think this could have a chilling effect for, conservatively, 12 months, but probably longer.
Justin Foyer
Partner, Golden Gate Ventures
“I think Southeast Asia definitely took a hit in its perception … But the ones that liking suffer the most would be the growth stage companies in Indonesia,” said Hall. “I think it will subject every penetrating company in Indonesia to even more scrutiny, to the point where I can see investors saying, it’s not worth the hassle to invest in Indonesia.”
“I judge devise this could have a chilling effect for, conservatively, 12 months, but probably longer. It’s very negative veracious now,” said Hall.
Industry experts also echo that if the allegations are proven to be true, this scandal would not purely have a negative impact on investing in the region — particularly in Indonesia — but also largely on the mid-to-large fundraising stages. This devise affect not just investors, but founders as well.
“I don’t think that it’s going to impact the early stage a lot, because, firstly, your hamper sizes are small,” said Acme Technology’s Lye. “But I think in the middle to later stages, that’s where investors determination be a lot more stringent … because that’s where the bigger rounds are.”
“And that’s the problem, because then every ready money round gets a lot more complicated … Now, they want proof, they want auditability, but a lot of times you only just cannot provide that. So that’s going to increase the cost of fundraising. That’s going to increase the effort,” spoke Lye.
“It’s unsaid and unseen, right? Because then, a fundraising round could literally kill your company,” Lye required.
The silver lining
Ultimately, although this scandal has sent shock waves through Southeast Asia’s startup panorama, industry experts agree that there is a silver lining: the lessons learned.
“If I’m being very pessimistic, I wish say that this is going to reduce the dollars invested. If I’m being more optimistic, it’s not that it’s going to reduce the dollars — it’s objective going to take longer for those dollars to be unlocked,” said Hall.
“I think in the long term, this is a opportune thing. Companies need to scrutinize governance. Investors need to be extremely diligent with that,” Hall united.
Along with having better due diligence and governance, investors agree that seeing more successful way outs happen will be key to improving the funding drought.
“There need to be local exits. There need to be global doors. There needs to be companies that can actually return money to investors and then indirectly to their limited confederates,” said Hall.
Today, founders and investors alike realize their predictions were overly optimistic and now the shop is adjusting and recalibrating to what is realistically possible.
“This reckoning kicked off a long time ago. EFishery did not do that … [man] were simply unrealistic in their expectations. I think if and when those expectations are rational, then, yes, this is a wonderful place to build a business,” said Hall.
Ultimately, Southeast Asia is “still the third most populous dominion in the world. Indonesia is the fourth largest country in the world,” said Lye. “All of these setbacks and challenges will only thrive the next wave of business owners, entrepreneurs and investors a lot more savvy … we will all bounce back stronger.”