Indonesia's Startup Ecosystem Faces Challenges After eFishery Scandal

Impact on Funding and Investor Confidence

The recent scandal involving eFishery, a prominent Indonesian agritech startup, has sent shockwaves through the country's startup ecosystem. The revelation that eFishery's co-founder, Gibran Huzaifah, had falsified financial reports, leading to approximately $300 million in unaccounted investor funds, has resulted in a significant decrease in investor confidence. This incident has not only affected eFishery but has also had a broader impact on the startup landscape in Indonesia.

Changes in Investor Behavior

The eFishery scandal has prompted investors to become more cautious, with many adopting a more stringent approach to due diligence. According to Rama Mamuaya, partner at DSX Ventures and vice chairman of the Indonesian Venture Capital Association for Startups, many funding rounds were postponed following the news about eFishery. Investors are now demanding more realistic valuations and clear operational metrics.

Effects on Startups and Venture Capital Firms

The crisis has affected not only eFishery but also other startups and venture capital firms. Some investors, such as Temasek, have withdrawn from early-stage deals, while others, like Northstar Group, have sold parts of their portfolios. The pressure is also felt among venture capital firms, with some attempting to divest their stakes in startups at discounted prices.

Shift in Investment Standards

The eFishery scandal has led to a shift in investment standards, with investors now expanding their legal and financial due diligence, conducting deeper reference checks, and demanding more realistic valuations and clear operational metrics. According to Sang Han, partner at East Ventures, the standards for investment have changed drastically. This change is reflected in the funding data, with Indonesian startups raising only around $80 million in the first half of 2025, a sharp decline from $200 million in the same period last year and far below the peak of $9.44 billion in 2021.