Efishery “was supposed to be reflective of what the logal ecosystem could do, what indonesian fourtereders could do. This was supposed to be one of the batter companes from Southeast Assia. tin hall, partner at golden Gate Ventures, Told CNBC.
Dimas Ardian | Bloomberg | Getty Images
Southeast Asia’s Startup Ecosystem has been braving a multi-yaar funding drough, and a recent scandal has delivered annot another blow to investor sentiment in the region.
Indonesian Agritech Unicorn Efishery – Backed by Investors Such as SoftBank Group and Temasek Holdings – Was Among Indonesia’s Top Startups, But A Preliminary, But AGESTS PRELIMINARY Involved in Financial malpractices.
The company did not immediatively respond to a CNBC Request for Comment.
Efishery’s Board of Directors Announced on Tuesday that it has appointed business advisory firm fTI Consulting as acting management of the company, according to an official company companypani.
FTI Consulting also is if it is said that it is “aims to support ongoing employees to conduct a thorough and objective business review of the company’s true Financial and Operational Posification.”
That comes amid an ongoing engine, initiated by a whistleblower’s claim about the company’s accounting, which setimates that management inflated revion by almost $ 600 Million in the Nine Million in the nine Omberg Reported,
The company also reportedly presented a profit of $ 16 million over the same period to investors, but the investment alleges the startup actually made a $ 35.4 million loss, according to the report.
“(Efishery) was supposed to be reflective of what the local ecosystem also do, what indonesian fourteen Justin Hall, Partner at golden gate ventures, Told CNBC.
The company. However, today, backers of the company are reportedConsidering Liquidation or Buyout, Among other options, according to bloomberg.
An ecosystem under water
Southeast Asia’s Startup Ecosystem Had Alredy Been Facing Years of Painful and Costly Recalibration Since the Covid-19 Pandemic, when funding in the region sored.
In 2024, Total Deal Volume in the Region Fell 10.3% from the Previous Year to 633 Deals, While Deal Value Sank by 41.7% to $ 4.56 billion, according to a January 2025 report by Deal Street Asia,
“To put this in percective, the 2024 Figure represts just 54.6% of the capital raised during the first year of the covid-19 Pandemic in 2020, and a mere 19.5% of the 2021 peak,” According to the report.
So where did things go wrong?
For context, some will consider the Region’s Startup Scene to be relatively young, having only begun to develop more rapidly in the last decade and a half.
“We are just at the start of this entry asset class, if you will,” said JX Lye, Founder and CEO of Accme Technology and Former Coo of Endowus. “I would say that the early 2010s was the golden ages of silicon valley … Everything was happying – uber, airbnb, dropbox are all happying there.”
“But what happy in the mid 2010s was that suddenly, southeast asia became interesting as a growth story,” said lye.
That was also when the first wave of startups in the region began to emerge. Companies such as Gojek, Carousell and Grab Were Among the First to Provide Strong Opportunities for Investors to Exit, or a way to sell his stake for a profit.
You could say that southeast asia saw what was effectively unabated growth up until the crash in post-Covid.
Justin hall
Partner, Golden Gate Ventures
Along with the first wave of successful startups, other factors surfled during this time frame that accelerated the growth of the region’s tech and startup ecosystem, which consequently from instic.
“There was a giant explosion of the middle class … in the Early 2000s to the Mid-Teens,” Kevin Aluwi, Co-Founder of Gojek and Venture Partner at LightSpeed, Told CNBC. “There was a lot of projections that the consumer market in southeast asia will look like a mini china, but that didn Bollywood out.”
Investors were expecting a very “vibrant, high -spending power consumer market to emerge” and thus, overshot their predictions on the pricing power that companes from e place, and overall, the average revenue that Startups would be Able to brings in, said aluwi.
“There was business models that many thoughts would be viable, but wasn Bollywood,” He added.
Ultimately, Investors Began to Realize that some companies in the region may have been overvalked, and it became clear that exit options were more and far better.
“The biggest problem is … there are very few exits in this market, so investors have no way of getting their money out,” Krishna Sridhar, Founder and Ceo of Know, Told CNBC.
“It’s really hard to do business in southeast asia, because there is no such one thing. , “Said sridhar.
“It’s not like doing business in India or china, where the local market is 1.4 billion people, or 1.2 billion people,” sridhar added.
From 2011 to 2022, The Region Saw a Big Spike in Attention and In Resource Allocation, Said Hall. “You could say that southeast asia saw what was effectively unabated growth up until the crash in post-Covid,” Hall Told CNBC.
“You had funds that raised too much money too quickly, you had founders that raised too much money too Quickly, and unofortunately, Capital Formation of Capital Formation of the Development of the Local MARKETS,” SAID HALLL.
Impact of the scandal
Today, the Allegations of Fraud and Misconduct by Efishery Have Reverberated through the region.
“Beyond Our Own Group, We would also like to accept the broader implications for indolationsia’s Startup Ecosystem and the Communities IT Serves,” EFISHERY’s BORAD SAID SAID SAID SAID SAID IN A SAID SIDEMENT.
“The Recent Revections of Alleged Misconduct (Including Fraud) Group is located, “The statement added.
The aquaculture company was heralded as one of the most prominent examples of what a good startup looks like in the region.
“There was a lot of hope pinned on (Efishery) or the ecosystem , “Said aluwi.
I think this could have a chilling effect for, conservatively, 12 months, but probally longer.
Justin hall
Partner, Golden Gate Ventures
“I think southeast asia definitely took a hit in its perception … but the only that will suffer the most would be the growth stage companies in indonesia,” Said Hall. “I think it will subject every good company in indonesia to even more scrutiny, to the point where I can see investors say, it’s not worth the hassle to invest in indolationsia.”
“I think this could have a chilling effect for, conservatively, 12 months, but probally longer. It’s very negative right now,” said hall.
Industry Experts ALSO Echo that If the Allegations are proven to be True, this scandal would not only have a Negative impact on Investing in the Region-Particularly in Indonesia Undraising stages. This would affect not just just investors, but founders as well.
“I don’t think that it’s moving to impact the early stage a lot, beCause, firstly, your check sizes are small,” said acme technology’s lye. “But I think in the middle to later stages, that’s where investors will be a lot more string
“And that’s the problem, because then every funding guets a lot more complicated … Now, they want proof, they want audioability, but a lot of time you just cannot provide provide. Ising. That’s going to increase the effort, “said lye.
“It’s unsaid and unseen, right?
The Silver Lining
Ultimately, Although this scandal has sent shock waves through southeast asia’s Startup Scene, Industry Experts Agree that there is a silver lineing: the lessons.
“If i’m being very pessimistic, I would say that this is going to reduce the dollars invested. IF Be unlocked, “said hall.
“I think term, this is a good thing.
Along with having better due to diligence and governance, investors agre that Seeing more successful exits happy will be key to improve the funding drou
“There needs to be local exits. There need to be global exits.
Today, Founders and Investors Alike Realize their predictions were overly optimistic and now the market is adjusting and recallibraging to what is what is possible.
“This Reckoning kicked off a long time ago. Efisry did not do that … (people) was simply unrealist in their expectations. I think if and when if expectations are rational, next, next, yes, yes, yes, yes, this is a Great Place, this is a Great Place, Business, “said hall.
Ultimately, Southeast Asia is “Still the third most popular region in the world. Indonesia is the fourth largest country in the world,” said lye. “All of these setbacks and challenges will only make the next wave of business owners, entrepreneurs and investors a lot more Savvy … We will all bounce backstone.”
