Efishery “was to reflect what a local ecosystem could do, what Indonesian founders could do. It was supposed to be one of the best companies from Southeast Asia. It was supposed to be a winner, “Justin Hall, a partner at Golden Gate Ventures, said CNBC.
Dimas Ardian Bloomberg Getty images
The startup ecosystem in Southeast Asia becomes a long-term financial drought, and the last scandal has made another blow to the mood of investors in the region.
The Indonesian Agritech Unicorn – supported by investors such as Softbank Group and Temasek Holdings – belonged to the best startups of Indonesia, but the initial, ongoing probe suggests that the company could be involved in financial abuse.
The company did not immediately answer at the request of CNBC for comment.
The Council of Directors of Efishera announced on Tuesday that it appointed the advisory company FTI Consulting FTI Consulting as a company management, in accordance with the official statement of the company obtained by CNBC.
FTI Consulting has also issued a statement with information that “it aims to support constant efforts to carry out a thorough and objective business review of a real financial and operational position of the company.”
This is an ongoing investigation, initiated by the company's accounting informant's claim, which estimates that the management overstated revenues of almost $ 600 million in nine months to September 2024, Bloomberg Reported.
According to the report, the company also presented a profit of $ 16 million in the same period, but the investigation claims that the startup actually had a loss of USD 35.4 million.
“(Efishery) was to reflect what a local ecosystem could do, what Indonesian founders could do. It was supposed to be one of the best companies from Southeast Asia. It was supposed to be a winner, “Justin Hall, partner at Golden Gate Ventures, said CNBC.
. businesswhich implemented an intelligent nutrition system for fisheries, reached the status of a unicorn in 2023 after the funds financing of the D series in the amount of $ 200 million. However, today apparently supporters of the company Considering the liquidation or purchase, according to other options, according to Bloomberg.
Ecosystem underwater
The startup ecosystem in Southeast Asia was already before the years of painful and expensive re-calibration from the Covid-19 pandemic, when financing in the region increased.
In 2024, the total volume of transactions in the region fell by 10.3% from the previous year to 633 offers, while the transaction value dropped by 41.7% to USD 4.56 billion, in accordance with the report of January 2025. Deal Street Asia.
“In other words, the number of 2024 accounts for only 54.6% of the capital raised in the first year of Covid-19 pandemic in 2020 and only 19.5% of the 2021 summit”, according to the report.
So where did something go wrong?
In the context, some recognize the startup scene in the region as a relatively young, he has just begun to develop faster over the past one and a half.
“We are at the beginning of the whole class of assets, if you want,” said JX Lye, founder and general director of ACME Technology and former Operational Director Endowus. “I would say that at the beginning of 2010 they were the golden age of the Silicon Valley … Everything was happening – Uber, Airbnb, Dropbox is happening there.”
“But what happened in mid -2010 was that suddenly Southeast Asia became interesting as a history of development,” said Lye.
At that time, the first wave of startups in the region began to appear. Companies such as Gajek, Carousell and Grab were one of the first to provide investors with strong opportunities to leave or sell their shares to obtain profit.
It can be said that Southeast Asia saw, which was an effectively indefinite increase until the accident in the like.
Justin Hall
Partner, Golden Gate Ventures
Along with the first wave of successful startups, other factors appeared at that time, which accelerated the increase in the ecosystem of the technology and startups of the region, which in consequence brought an influx of interest in investors.
“There was a gigantic middle class explosion … at the beginning of 2000 to half of teenagers,” said CNBC Kevin Aluwi, co-founder of Gajek and partner Venture in LightSpeed. “There were many forecasts that the consumer market in Southeast Asia will look like a mini China, but it did not work out.”
Investors expected that a very “lively, high -expensive energy consumer market” would appear, and thus rewrite their forecasts regarding the price authority, which the companies would have, the frequency of transactions, and in general the average revenues, what starts will be -up to bring, he said Aluwi.
“There were business models, which many considered profitable but not profitable,” he added.
Ultimately, investors began to realize that some companies in the region could have been overstated and it became clear that there are few options.
“The biggest problem is … There is very few to go out in this market, so investors are not able to get money,” said CNBC Krish Sridhar, founder and general director of Know Know.
“It is really difficult to do business in Southeast Asia, because there is no one. In Southeast Asia, we have seven different languages, seven different governments, seven different (systems) of regulations, “said Sridhar.
“It is not that conducting business in India or China, where the local market is 1.4 billion people, or 1.2 billion people,” added Sridhar.
In the years 2011–2022 there was a large increase in resources and allocation of resources in the region, said Hall. “It can be said that Southeast Asia saw what was effectively unspecified, until the disaster in the like,” said Hall CNBC.
“You had funds that raised too much money too quickly, the founders who collected too much money too quickly, and unfortunately the capital formation overtook the development of local markets,” said Hall.
Impact of the scandal
Today, the allegations of fraud and improper behavior by Efishera have gone throughout the region.
“In addition to our own group, we would also like to recognize wider implications for the startup ecosystem of Indonesia and the community it serves,” said the management of Efishera in a statement.
“The last apparitions of the alleged improper behavior (including fraud) in the group were deeply discouraging for all of us and can threaten trust in the Indonesian investment climate, in which the main subsidiaries of our group are located,” the statement adds.
The aquacultura company has been heralded as one of the most important examples of a good startup in the region.
“There was a lot of hope for (Efishery) as the next generation … Having this (bubble) crack, because the child of the poster of this development turned out to be (allegedly) fraudulent, I think it was really disappointing for the ecosystem,” said Aluwi.
I think it may have a cool effect, conservative, 12 months, but probably longer.
Justin Hall
Partner, Golden Gate Ventures
“I think that Southeast Asia has definitely hit his perception … But those that will suffer the most would be stage companies in Indonesia,” said Hall. “I think it will be even more control in Indonesia, to the extent that I see that investors say that it is not worth investing in Indonesia.”
“I think it may have a cool effect, conservative, 12 months, but probably longer. This is very negative now, “said Hall.
Industry experts echo also that if the allegations are true, this scandal would not only have a negative impact on investing in the region-especially in Indonesia-but also mainly at the stages of obtaining funds. This would affect not only investors, but also the founders.
“I do not think that it has a big impact on the early stage, because first of all, your sizes of checks are small,” said Lye Acme Technology. “But I think that in the middle to later stages, there investors will be much more stringent … because there are larger rounds.”
“And this is a problem, because then each funding round becomes much more complicated … Now they want evidence, they want audit, but you can't provide it many times. This will increase the costs of raising funds. This will increase the effort, “Lye said.
“He is unspeakable and invisible, right? Because then the round of obtaining funds can literally kill your company, “said Lye.
Silver lining
Ultimately, although this scandal sent shock waves through the startup scene of Southeast Asia, industry experts agree that there is a silver lining: drawn conclusions.
“If I am very pessimist, I would say that it will reduce the invested dollars. If I am more optimistic, it is not that it will reduce dollars – for these dollars it will take longer reflect – said Hall.
“I think that in a long term it is a good thing. Companies must examine management. Investors must be very urgent with this, “added Hall.
Along with better due diligence and management, investors agree that the event of more successful exits will be the key to improving the drought of financing.
“Local outputs are necessary. There must be global outputs. Companies are needed that can actually return money to investors and then indirectly their limited partners, “said Hall.
Today, both founders and investors are aware that their forecasts were too optimistic, and now the market adapts and calibrates again to realistically possible.
“This counting began a long time ago. Efishery did not do it … (people) were simply unrealistic in their expectations. I think that if and when these expectations are rational, yes, it's a great place to build and business, “said Hall.
Ultimately, Southeast Asia is “the third most populated region in the world. Indonesia is the fourth largest country in the world, “said Lye. “All these failures and challenges will make only another wave of business owners, entrepreneurs and investors much more experienced … We all bounce back stronger.”