Temasek-backed eFishery accused of inflating revenue and profit by US$600 million

Indonesia’s agritech unicorn eFishery is under scrutiny following allegations of inflated revenue and profit figures, casting a shadow on the country’s start-up scene. An internal investigation, initiated by a whistle-blower’s claims, accuses eFishery of overstating revenue by nearly US$600 million (S$811 million) for the nine months ending September 2024. The probe, led by FTI Consulting and detailed in a draft report obtained by Bloomberg, indicates that over 75% of the company’s reported figures were fabricated. eFishery, once celebrated as a revolutionary player in Indonesia’s fish farming industry, provides automated feeding systems and supplies to fish and shrimp farmers. Its success propelled it to unicorn status in 2023, with a valuation of US$1.4 billion during a funding round involving G42, an artificial intelligence firm linked to UAE royalty Sheikh Tahnoun bin Zayed Al Nahyan.

Investigation reveals alarming discrepancies

The preliminary report estimates eFishery’s actual revenue for the period at US$157 million, significantly lower than the US$752 million presented to investors. Similarly, a purported US$16 million profit for 2024 was revealed to be a US$35.4 million loss. Inflated figures are suspected in prior years as well, according to the report. The investigation, triggered in December 2024, has already led to the dismissal of co-founder and CEO Gibran Huzaifah. “We remain dedicated to upholding the highest standards of corporate governance and ethics,” the company stated in an e-mail response. The draft report also reveals that eFishery exaggerated the number of fish feeders in use. While the company claimed 400,000 units were operational, early findings suggest the number is closer to 24,000.

Impact on investors and stakeholders

The revelations have shocked shareholders, including key backers Temasek and SoftBank, both of whom declined to comment on the matter. Despite measures such as audits by PricewaterhouseCoopers and Grant Thornton, and internal controls like channel checks, the scale of the alleged fraud has surprised stakeholders. As eFishery grapples with the fallout, discussions among investors focus on how to manage the company’s assets and remaining funds. Current records show retained losses of US$152 million since the company’s inception, with total assets valued at US$220 million. These include US$63 million in accounts receivable and US$98 million in investments. The scandal arrives at a challenging time for Indonesia’s start-up ecosystem, which has faced headwinds in raising new funding amidst economic uncertainty. eFishery’s case could further erode investor confidence in the sector, previously buoyed by the success of its unicorns.