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The Effes would be supposed to “reflect what the local ecosystem could do, what the Indonesian founders could do. It was supposed to be one of the best companies in Southeast Asia. It was supposed to be a winner,” Justin Hall, Golden’s partner Gate Ventures, told CNBC.
Dimas Ardian | Bloomberg | Getty images
The Southeast Asian start ecosystem has been challenging a financing drought of several years, and a recent scandal has given another blow to the feeling of investors in the region.
The Unicornia de Agitech Indonesia, backed by investors such as Softbank Group and TeMek Holdings, was among the main new indonesia companies, but a preliminary and continuous investigation suggests that the company may have been involved in bad financial practices.
The company did not immediately respond to a request for CNBC comments.
The Efishery Board of Directors announced Tuesday that it has appointed the Commercial Advice Firm FTI Consulting as the company’s interim management, according to an official statement of the company obtained by CNBC.
FTI Consulting also issued a statement that says that “it aims to support continuous efforts to carry out an exhaustive and objective commercial review of the true financial and operational position of the company.”
That occurs in the midst of ongoing investigation, initiated by the claim of a complainant on the accounting of the company, which estimates that management inflated revenues in almost $ 600 million in nine months until September 2024, Bloomberg reported.
According to reports, the company also presented a gain of $ 16 million during the same period for investors, but the investigation alleges that the startup really made a loss of $ 35.4 million, according to the report.
“It was supposed to Golden Gate Ventures, he told CNBC.
He companywhich deployed an intelligent food system for fishing, reached the state of unicorn in 2023 after a financing round of the D $ 200 million series. However, today, the company’s sponsors are Taking into account the settlement or purchase, among other options, according to Bloomberg.
A underwater ecosystem
The Southeast Asian start ecosystem had already faced years of painful and expensive recalibration from the COVID-19 pandemic, when financing in the region shot.
In 2024, the total volume of agreements in the region fell 10.3% of the year prior to 633 agreements, while the value of the agreement sank at 41.7% to $ 4.56 billion, according to a January report from 2025 of Deal Street Asia.
“To put this in perspective, the 2024 figure represents only 54.6% of the capital collected during the first year of the Covid-19 pandemic in 2020, and only 19.5% of the 2021 peak,” according to the report.
So where did things go wrong?
For the context, some will consider that the starting scene of the region is relatively young, since it only began to develop more quickly in the last and a half decade.
“We are just at the beginning of all kinds of assets, so to speak,” said Jx Lye, founder and CEO of Acme Technology and former Endowus operations director. “I would say that at the beginning of 2010 they were the golden ages of Silicon Valley … everything was happening: Uber, Airbnb, Dropbox are happening there.”
“But what happened in the mid -2010 was that suddenly, Southeast Asia became interesting as a growth story,” Lye said.
That was also when the first wave of new companies in the region began to emerge. Companies such as Gojak, Carousell and Grab were among the first to provide strong opportunities for investors to come out, or a way of selling their participation for earnings.
It could be said that Southeast Asia saw what was indeed the unableed growth to the accident in the Covid.
Justin Hall
Partner, Golden Gate Ventures
Together with the first wave of new successful companies, other factors arose during this period of time that accelerated the growth of the technological and starting ecosystem of the region, which, consequently, brought an influx of interest from investors.
“There was a giant explosion of the middle class … In the early 2000s to the mid -teenagers,” said Kevin Aluwi, co -founder of Gojak and Aventure Partner of Lightspeed, to CNBC. “There were many projections in which the consumer market in Southeast Asia will look like a Chinese mini, but that did not work.”
Investors expected a very “vibrant and high expense” power consumption market “and, therefore, overvalued their predictions on the pricing power that companies would have, the frequency of the transactions they would have place and, in general, the average income that would be the new companies. Able to bring, Aluwi said.
“There were business models that many thought they would be viable, but they were not viable,” he added.
Ultimately, investors began to realize that some companies in the region may have been overvalued, and it was clear that the opportunities for exit were few and distant.
“The biggest problem is … there are very few exits in this market, so investors have no way of getting their money,” said Krish Sridhar, founder and CEO of Know, CNBC.
“It is really difficult to do business in Southeast Asia, because there is no such thing. In Southeast Asia, we have seven different languages, seven different governments, seven (systems) different regulation,” said Sridhar.
“It’s not like doing business in India or China, where the local market is 1,400 million people, or 1.2 billion people,” Sridhar added.
From 2011 to 2022, the region saw a great peak in attention and in the allocation of resources, said Hall. “It could be said that Southeast Asia saw what was effectively wired growth until the accident in the Covid,” Hall told CNBC.
“He had funds that raised too much money too fast, he had founders who raised too much money too fast and, unfortunately, capital formation exceeded the development of local markets,” Hall said.
Scandal impact
Today, the accusations of fraud and misconduct of Efishery have reverberated throughout the region.
“Beyond our own group, we would also like to recognize the broader implications for the starting ecosystem of Indonesia and the communities it serves,” said the Efishery Board in a statement.
“The recent revelations of alleged misconduct (including fraud) within the group have been deeply discouraging for all of us and can endanger the confidence in the Indonesian investment climate where the main subsidiaries of our group are found,” added the statement .
The aquaculture company was announced as one of the most prominent examples of how a good startup looks in the region.
“There was a lot of hope trapped in (Efishery) being the next generation … having that explosion (bubble), because the son of the poster of that development turned out to be (supposedly) fraudulent, I think it is really disappointing for the ecosystem,” said Aluwi .
I think this could have a chilling effect for, conservatively, 12 months, but probably more.
Justin Hall
Partner, Golden Gate Ventures
“I think the Southeast Asia definitely received a blow to his perception … but the ones who will suffer the most would be the companies of the growth stage in Indonesia,” Hall said. “I think it will submit to all good companies in Indonesia to even more scrutiny, to the point that I can see investors say that it is not worth investing in Indonesia.”
“I think this could have a chilling effect to, conservatively, 12 months, but probably more. It is very negative at this time,” Hall said.
Industry experts also echo that if the accusations are demonstrated that they are true, this scandal would not only have a negative impact on investing in the region, particularly in Indonesia, but also largely in the stages of collection of funds from funds from median to general. This would affect not only investors, but also founders.
“I don’t think the initial stage affects a lot, because, first, the sizes of their checks are small,” said Lye de Acme Technology. “But I think that in the middle to later stages, that is where investors will be much more strict … because that’s where the biggest rounds are.”
“And that is the problem, because every round of funds becomes much more complicated … now, they want evidence, they want auditability, but many times you cannot provide that. So that will increase the cost of fundraising. That will increase The effort, “Lye said.
“It is not said and it is not said, right? Because then, a round of fundraising could literally kill his company,” Lye said.
The silver lining
Ultimately, although this scandal has sent shock waves through the Southeast Asian start scene, industry experts agree that there is a positive side: the lessons learned.
“If I am being very pessimistic, I would say that this will reduce the dollars invested. If I am being more optimistic, it is not that it reduces the dollars, it will only take more time for those dollars to be unlocked,” Hall said.
“I think that in the long term, this is a good thing. Companies need to analyze governance. Investors must be extremely diligent with that,” Hall added.
In addition to having a better due diligence and governance, investors agree to see that more successful exits will occur will be key to improving financing drought.
“There must be local exits. There must be global exits. There must be companies that can really return money to investors and then indirectly to their limited partners,” Hall said.
Today, the founders and investors realize that their predictions were too optimistic and now the market is adjusting and emphasizing what is realistically possible.
“This calculation began a long time ago. Efishery did not do that … (the people) was simply not realistic in their expectations. I think that if those expectations are rational, then, yes, this is a great place to build a business,” Hall said.
Ultimately, Southeast Asia “remains the third most populous region in the world. Indonesia is the fourth largest country in the world,” Lye said. “All these setbacks and challenges will only make the next wave of business owners, entrepreneurs and investors much smarter … we will all recover stronger.”
