The eFishery Scandal: A Wake-Up Call for Southeast Asia's Startup Ecosystem

The eFishery Investigation

eFishery, a prominent Indonesian agritech unicorn backed by investors like SoftBank and Temasek, is under scrutiny due to allegations of financial misconduct. This investigation could have a chilling effect on the region’s startup scene for at least 12 months.

Justin Hall, partner at Golden Gate Ventures, expressed disappointment, stating that eFishery was expected to be a shining example of what Indonesian startups could achieve. However, a whistleblower’s claim suggests that the startup may have inflated its revenue by nearly $600 million and falsely reported a $16 million profit, when in reality, it faced a $35.4 million loss.

Southeast Asia's Startup Ecosystem

The startup ecosystem in Southeast Asia has been struggling with a funding drought since the pandemic. In 2024, deal volume fell by 10.3%, and deal value dropped by 41.7% compared to the previous year. Investors had high expectations for the region, likening its potential to that of China, but many startups proved to be overvalued.

Impact of the Scandal

The eFishery scandal has broader implications for Indonesia's startup ecosystem. It may deter investors and subject healthy companies to increased scrutiny, making fundraising more complicated and potentially stalling growth in the region. Hall believes that the negative perception could last longer than a year, affecting mid-to-large fundraising stages significantly.

A Silver Lining?

Despite the challenges, experts believe that this scandal could lead to better governance and due diligence among investors. The lessons learned from this situation may ultimately strengthen the ecosystem as it recalibrates expectations and becomes more realistic about its growth potential. As Lye suggests, the region's population and market potential still present opportunities for savvy entrepreneurs and investors to thrive in the future.