He slowly included phoney numbers into the financial report. Instead of five years of hard labour, he turned his firm into a winner in one hour. He clicked send to show his investors; surely, he would get caught.

But he did not. It pleased his backers that his business was growing. Without knowing the data were manufactured, they contributed extra money to help Gibran avoid bankruptcy. In late 2018, he began building a house of cards that would cost some of the world’s greatest money managers hundreds of millions of dollars.

Six years after starting a second set of accounts (a real one for his team and a second, inflated book for investors), eFishery was one of Asia’s brightest firms with $1.4 billion in valuation and 2,000 employees. In addition to automated fish feeders to enhance output, it offered financing.

By the time it fell, the fraud had spread worldwide with bogus shell firms and inflated accounts. According to an internal enquiry, the corporation reported $752 million in first-nine-month 2024 revenues but actually earned $157 million.

Deception caught several of the world’s most prominent venture capitalists, including SoftBank Group Corp. and Temasek Holdings. Abu Dhabi’s 42XFund and Chamath Palihapitiya’s Social Capital to Sequoia India and Southeast Asia (now Peak XV).

The episode raises unpleasant concerns about ego, groupthink, and how so many red flags were missed in backing a business darling. At least $300 million was lost by investors. It is unclear how much each fund lost, and some may have sold shares at a greater valuation.

The beginning

Gibran was reared in East Jakarta’s slums by a construction worker father and a homemaker mother. MIT of Indonesia, Institut Teknologi Bandung, was his biology school. When his family struggled financially, Gibran was on his own. As food was scarce, he slept in mosques and at school, tutoring for money, working in a convenience store, and various side jobs.

Inspired, he rented ponds after taking a fish-farming course. He rapidly discovered hard work, small margins, and finicky fish.

Aquaculture, or water agriculture, is hard. Too little feed starves fish, while too much wastes money and produces algae. Spawned eggs are nursed in a series of pools before being released into larger ponds and given precise amounts at specific intervals. After months of care, fish must be sold and transported, sometimes alive, to processors and customers. Prices can vary greatly.

Gibran was determined. To make more money, he opened warungs to sell cooked fish and urged grocery stores to carry his product. While managing over 70 ponds, he intended to start a seafood restaurant franchise.

One veteran farmer advised him that growth makes feeding a chore. Gibran welded and programmed an automated fish feeder himself. His student project was a shiny milk bucket connected to a funnel that gravity-fed fish meal pellets onto a rotating disk. Texting opened a slide to release the feed, which scattered across the water.

Using a prototype on his motorcycle, he travelled between farms on rutted roads and village pathways for months. As the initially reluctant farmers observed yield benefits and provided testimonials, the initiative gained traction.

To raise awareness and win cash prizes to keep the business alive, he entered Jakarta startup competitions and quickly learnt the ABCs of venture capital: how to write a pitch deck, present his business model, and thrill investors with vision and financials.

eFishery struggled with their feeders’ expensive pricing and small-scale fish farming’s tight margins. Costs range from $400 to $600, depending on size and incentives. That was too expensive for many Indonesian clients, where 10% of the 280 million people live below the poverty line, and labour is inexpensive.

Gibran immediately switched from selling to renting his machines to farmers. He thought he could launch his feeders faster and recoup their expenditures in a few years. Because he had to buy the equipment ahead, he was spending money.

He tried to attract regional venture funders but was turned down. Singapore regulatory documents show the startup had $8,142 in cash by December 2017.

Aqua-Spark remained interested. It offered $1.5 million in three equal tranches for the Series A round in May 2018. Only other investors could provide the final $500,000.

The bargain bought him time, but no one else joined. Gibran believed he was responsible for the first million dollars if he failed to get investors. Aqua-Spark co-founder Amy Novogratz stated that the agreement did not impose personal liability.

He asked fellow Indonesian founders how they raised new investments, dejected. Gibran believed the unclear, coded advice meant fudging the figures. He had a moral dilemma: be honest and fail, or manipulate the stats and keep the show going for himself, staff, and farmers.

The trolley speeds up

The sentiment changed drastically after a successful Series A fundraising, attracting Singapore-based Wavemaker Partners and San Francisco-based 500 Global’s Southeast Asia fund. It raised $4 million, including Aqua-Spark’s third tranche.

Gibran had to justify the spreadsheet’s new numbers. He started with a simple system. He said fish farmers had already bought feed and sold fish, so he offered 2% to 3% to “move” their business onto eFishery.

It was a sophisticated trick. Field consumers were unaffected. They used the same systems to sell to the same customers at the same prices. However, eFishery’s income increased after those transactions were added to its financial accounts.

Kabayan, a finance scheme that used the startup’s aquaculture expertise to assess harvesters’ credit scores and secure loans from lending platforms, was riskier. A 1% to 3% commission and little risk were promised by eFishery. The truth was worse: eFishery owed the debts, and default rates were high.

eFishery’s Singapore-filed financial filings indicate a 50-fold increase in sales from $185,405 in 2018 to $10 million in 2019. Investors were thrilled. In the same period, it went from a loss to a gross profit, attracting term sheets inconceivable months earlier. With greater money came rapid expansion: applications to buy fish directly from farmers and drop points across islands to distribute feed and collect fish.

It affected some farmers. In Cirebon, West Java, Suganda was one of the first to use the eFeeder machine. A chest-high plastic drum can carry 100 kg (220 lbs) of fish feed. The barrel’s bottom control box decides how much feed the pond fish receive. Farmers downloaded an eFishery app and entered feeding times and feed amounts to utilise the machine. Suganda denied that Gibran asked him to inflate numbers.

Suganda and his Cirebon collective farmers grew with $150,000 in loans from eFishery. His revenue increased by 20% to $603 a month as his pond count went from 10 to 70.

This progress occurred as startup investors sought more help-the-world concepts. Morningstar reported that sustainable fund assets rose 67% to roughly $1.7 trillion in 2020 as investors sought social and environmental partnerships.

With Gibran’s rags-to-riches story and increasing financials, eFishery was a rising star. Gibran raised $20 million in Series B funding in 2020 from private equity firm Northstar Group and Go-Ventures (formerly Argor Capital).

Money and pride

Gibran said eFishery did not need extra money now. The pandemic even helped him balance the books: investors expected revenues to drop, but the business was doing well. He fabricated slow growth to catch up with the genuine data.

He learnt that SoftBank founder Masayoshi Son wanted to talk. In 2021, the COVID-19 pandemic peaked. He could not show SoftBank the fish farms in Indonesia that used his product like he did with prior investors. He only had an hour.

Gibran was anxious at his Bandung office. He bred fish on a small Indonesian farm a few years ago, and now SoftBank, which had raised roughly $100 billion for startup deals through its “Vision Fund,” was ready to verify his conviction in eFishery’s future.

The company provided support to Yahoo Japan, Alibaba Group Holding, and Grab Holdings, which is one of Southeast Asia’s most promising companies. Gibran mentioned that Son, who was listening from Tokyo, interrupted the pitch after 15 minutes. One of SoftBank’s term sheets valued the company at $200 million, which made Gibran very happy.

Sequoia India and Southeast Asia (Peak XV) suddenly submitted a $300 million bid. Temasek, Singapore’s multibillion-dollar state-owned investor, also sought allocations. Gibran opened WhatsApp and saw a text from Temasek CEO Dilhan Pillay, which he thought was spam. Pillay requested time to discuss.

He enjoyed the attention his small startup was getting, but he spent nights worrying about its weak foundations. eFishery reported 1.6 trillion rupiah ($95.3 million) in revenue and 142 billion rupiah before-tax profit in 2021. Revenue fell 40% to 958 billion rupiah, with a pre-tax loss of 164 billion rupiah.

Gibran felt uneasy with the lie, but he remembered the trolley problem. He noticed how eFishery helped certain farmers. His startup had an impact, he believed. Taking this money would put further pressure on eFishery to grow, thus reconciling its two books would have to wait. He was split.

After the interest, SoftBank, Temasek, and Sequoia India offered $90 million in new funding at a $410 million value, according to Gibran, sources, and Alternatives.pe. The price was high for a young firm led by an unskilled Indonesian fish salesperson. Three years ago, eFishery was worth $12 million, but the world’s greatest investors noticed. The deal was accepted.

Red flags missed

In retrospect, warning indicators existed. The 2020 Singapore holding company financial statement was filed in 2024. The lack of disruption in markets where eFishery claimed to be making waves was noteworthy. The company purportedly had over 300,000 feeding units in the field and over 44,000 fish and shrimp farmers buying from its platform by 2023, which should have shaken the supply chain.

Gibran ghosted them when one investor with feed producer ties tried to connect them with eFishery, a win-win for both parties. Another said Gibran was typically three months late with basic numbers and that a feeder component manufacturer told them it only produced enough for 5,000 units per year. Senior officials at Indonesia’s largest fish feed distributors informed a separate investor that their unchanging sales were confusing.

Gibran said he needed larger farms with over $1 million in annual sales for his inflation approach to make sense after his Series C funding round, because the claims and targets were so big. After searching the nation, he found nothing to join.

He states that an employee proposed a solution in early 2022. By establishing a complex network of subsidiaries and managing farmers’ accounts, the firm became sophisticated enough to exaggerate transactions. He notes that this led to the creation of five enterprises with over 5,000 accounts related to fish feed and fish sales.

While trying to meet investor claims, he burned through actual money. The lax checks and collections on the lending site made it popular with fish farmers, but default rates rose. The software had major troubles, requiring nationwide field teams and sales matchers.

By then, phoney numbers made eFishery seem supercharged. Series D fundraising spearheaded by Abu Dhabi-based sovereign fund 42X raised $200 million at a $1.4 billion value. The investors included Malaysian pension fund KWAP.

During all these raisings, eFishery was reviewed by top investors and auditors. Three sources said Grant Thornton audited the Indonesian entity’s 2022 annual financial statements while PwC was a week away from signing off.

Grant Thornton is investigating the eFishery claims and is concerned about them. Gibran said 20 farmers were visited for Series B fundraising and 70 for Series C. He said the due diligence firms used eFishery’s database of farms to tell the startup which they planned to visit, aside from a few random spot inspections.

This allowed Gibran to prepare the ground. Gibran adds that local area managers were handed fact sheets with numbers to tell visitors and informed farmers; the rest was luck.

The same issues that make Indonesia a difficult market can make auditing corporations difficult. The nation has over 17,000 islands, and much of the job is done in rural areas where exact addresses are not enough, and farmers need to reach the front door.

The fall

Gibran planned to fix the business after investors were told it was stopping expansion to focus on financial sustainability before going public. Make eFishery Great Again was his Project MEGA.

To improve its financial health, eFishery aimed to more than halve its losses before tax to 107 billion rupiah, cut late loans on its Kabayan programme, and persuade more farmers to use its technology. It also wanted additional farmers to buy and sell fish through them. They had a challenge: half of their 28,000 Kabayan fish and shrimp growers were idle. Documents showed another 7,000 frozen accounts. Over 90% of eFishery’s sales came from firms with less than 2% gross profit margin.

Gibran revealed in a 30-minute Zoom chat on December 11 that he confessed to Aqua-Spark co-founder and eFishery board member Novogratz, who was one of the company’s original investors and his mentor. Gibran stated that Novogratz was deeply disappointed in him.

Two days later, on December 13, eFishery’s Steering Committee suspended Gibran. An interim CEO and CFO took control of eFishery, including its bank accounts.

Many lessons learnt

Investors are contemplating how to close the company. The board hired FTI Consulting Singapore to evaluate and manage the organisation. It advised closing the business and returning investors’ money. Abu Dhabi’s 42X, which spent $100 million in April 2023, may receive $8.3 million two years later.

A mystery is what happened to all the money. The FTI research suggests that some staff stole money, and Gibran received a salary and bonus comparable to a much larger company, but he seemed to live modestly. One worker drove a Hyundai Ioniq 5 to work. Indonesian tycoons have fled with millions of investment dollars, while he stays in Bandung, a second-tier city where he founded the firm to cut costs. None of his critics have proven he embezzled.

According to Winnie Yamashita Rolindrawan, partner at Indonesian law firm SSEK, the scandal exposed vulnerabilities in regulatory oversight and corporate governance in Indonesia.

While Rolindrawan advocated for VCs adopting a more thorough due diligence approach, on their part, startups must maintain accurate and verifiable records. Investors need to closely monitor, apart from carrying out post-funding audits, to ensure that startups operate transparently.

The post The rise & fall of eFishery appeared first on International Finance.

Where it all began

When Mulyani Indrawati was first appointed finance minister in 2005, Indonesia’s economy was in tatters. The country was still reeling from the late-1990s Asian financial crisis and struggling to recover from a devastating tsunami in Aceh and several earthquakes that required massive reconstruction funding. The cost to rebuild Aceh alone was estimated at around $4.5 billion, much of it needing foreign aid.

In Jakarta, the Finance Ministry she inherited was bloated and inefficient, while state institutions were rife with corruption. The nation’s largest bank, Bank Mandiri, had been mired in corruption scandals, and the banking sector at large was shaky. Poverty and unemployment were stubbornly high. Indrawati’s desk was piled high with urgent reforms from day one.

Facing this crisis, Indrawati moved swiftly. One of her first acts was to clean house. She fired dozens of corrupt tax and customs officers and disciplined thousands more, signalling a zero-tolerance stance on graft. She overhauled incentive structures in her ministry by paying honest officials better to remove the temptation of bribes. Backed by reformist President Susilo Bambang Yudhoyono, she slashed wasteful spending and tightened Indonesia’s budget. These efforts restored investor confidence, as foreign direct investment nearly doubled in her first year, from $4.6 billion in 2004 to $8.9 billion in 2005.

In 2008, Indonesia was affected by the global financial crisis, resulting in capital flight and a liquidity crunch. The crisis prompted the emergency bailout of Bank Century, a medium-sized lender, to prevent a widespread bank run. The government injected roughly Rp6.7 trillion (around $700 million) to rescue Bank Century, arguing it was necessary to protect the broader banking system. The bailout soon exploded into one of Indonesia’s longest-running political scandals. Critics alleged the rescue was mishandled and that some of the Rp6.7 trillion might have ended up in the wrong hands.

A special parliamentary enquiry claimed there were suspicious transactions and potential fraud associated with the bailout. Though Indrawati defended the decision as necessary to avert systemic collapse, the ruckus that ensued in the media and legislature put her under intense pressure.

Economist who means business

By 2010, Mulyani Indrawati had made a big impression on Indonesia’s economic trajectory. During her first tenure, growth rebounded (hitting 6.6% in 2007, the highest since the 1997 crisis), and public debt fell dramatically. Indonesia’s debt-to-GDP ratio, which had exceeded 90% in the aftermath of the Asian crisis, was brought down to around 30% by 2009, immensely improving the country’s fiscal stability. These achievements earned her international accolades.

Euromoney magazine named her “Finance Minister of the Year” in 2006, and she was lauded as Asia’s Finance Minister of the Year by Emerging Markets in 2007.

After six years at the World Bank, Indrawati returned to Jakarta in 2016 at the request of President Joko Widodo. Nearly 20 years after her initial appointment, she has now been back in the finance chief’s seat for almost a decade. The economic proof is there for all to see.

Under her stewardship, Indonesia’s economy was thoroughly overhauled and expanded. Annual growth has generally been robust (typically in the 5–6% range in the late 2010s), and prudent fiscal management has slashed government debt levels. Borrowing costs have fallen, and credit ratings have improved. GDP grew from about $286 billion in 2005 to nearly $1.5 trillion by 2025.

This rapid rise has vaulted Indonesia into the ranks of the world’s 20 largest economies. The once-sprawling Finance Ministry has been slimmed down and modernised, especially in tax collection and customs, which were hotbeds of corruption before. Indrawati’s reforms in those areas, including digitising systems and cracking down on tax evaders, helped boost the number of registered taxpayers from 4.35 million in 2005 to almost 16 million by 2010, and even more in the years since.

Insatiable desire for infrastructure

For all of Indonesia’s gains, Mulyani Indrawati has also faced an uphill battle against deeply entrenched challenges. Upon returning to office in 2016, she found that some reforms had stalled in her absence, and new issues had emerged. In 2017, an OECD research paper bluntly concluded that Indonesia still had significant room for improvement in public governance.

“The quality of public governance, as measured by the World Bank estimate of government effectiveness, puts Indonesia well behind countries like the Philippines, Thailand, Malaysia, Vietnam, and Singapore,” the OECD noted.

In other words, Indonesia’s bureaucratic effectiveness lagged many of its regional peers, affecting everything from business licensing to public service delivery. Indrawati has worked to streamline regulations and improve coordination between central and local governments, but changing a large bureaucracy’s culture is a slow process.

A particular sore point has been Indonesia’s inadequate infrastructure, which for years has been a bottleneck to growth. A 2016 World Economic Forum report on competitiveness highlighted that Indonesia’s overall competitiveness (ranked 41st out of 140 economies) was dragged down by the poor quality of infrastructure, which ranked only 60th. The country suffers from chronic shortages of power, congested ports and airports, and overloaded roads and railways.

“Indonesia’s competitiveness is dragged down by the poor quality of its infrastructure (60th),” the WEF report warned, citing factors like frequent electricity outages for industry and inadequate transport networks. For a sprawling nation of over 17,000 islands, building connectivity is a colossal and expensive undertaking.

Mulyani Indrawati has had to juggle demands for new infrastructure spending against the need to maintain fiscal discipline. Under her guidance, infrastructure outlays did increase, especially during President Widodo’s term, which prioritised new highways, airports, and a subway for Jakarta, but progress sometimes felt slow given the scale of needs.

Nonetheless, Indrawati is undeterred. She sees infrastructure and human capital investment as the keys to unlocking Indonesia’s next level of development. In the late 2010s, she oversaw innovative financing schemes, such as infrastructure bonds and public-private partnership frameworks, to stretch public funds further in building roads, power plants, and ports. By 2020, such efforts were paying off, with multiple new toll roads and transit projects completed.

She also championed major increases in funding for education and healthcare. Indeed, about 20% of Indonesia’s national budget is now devoted to education, a priority Indrawati has consistently supported. This reflects her belief that long-term growth depends on a skilled, healthy population.

A prudent finance minister

Even as she pushes forward on economic reforms, Mulyani Indrawati now faces perhaps her most delicate political test yet. In late 2024, Indonesia elected a new president. Prabowo Subianto, a retired army general, marked the third administration Indrawati has served under (after Yudhoyono and Widodo). Prabowo campaigned on ambitious populist promises to accelerate growth and tackle inequality. Once in office in 2025, he wasted no time rolling out bold (and expensive) programmes, with expectations of rapid results.

Among his headline initiatives is an “extreme poverty eradication” free meals programme targeting schoolchildren and pregnant women across the country. The plan aims to provide free nutritious meals to more than 80 million young and expectant Indonesians. Indeed, in January 2025, the government quietly launched the first phase, serving meals to some 570,000 students and pregnant women on the first day alone.

Prabowo Subianto envisions scaling up to reach 82.9 million people by 2029 under this programme. While few dispute the merits of fighting child malnutrition, the cost of this free food initiative is enormous. Initial estimates put the price tag at around $28 billion over five years. It’s a figure that alarms many economists, given Indonesia’s commitment to fiscal discipline. In its first year, 2025, the programme is budgeted at 71 trillion rupiah to feed 15 million people. Such sums risk blowing up the deficit unless offset by new revenues or cuts elsewhere.

Prabowo Subianto’s vision isn’t limited to free meals. He has also touted grand plans for Indonesia to achieve food self-sufficiency by dramatically expanding domestic agriculture. His administration talks of creating vast new rice paddies and even large sugarcane plantations to reduce reliance on imports of staples like rice and sugar.

Unsurprisingly, the markets have reacted nervously to these big-ticket promises. Investors worry that Prabowo’s agenda, which includes free meals for tens of millions, large-scale farming schemes, and a push for 8% annual GDP growth, could lead to bloated budgets or heavy borrowing. In mid-2024, as his campaign promises became known, Indonesian bond prices wobbled, and the rupiah currency weakened.

Upon Prabowo Subianto’s election, credit rating agencies signalled concerns that debt and deficits might rise. When he reiterated plans for free school meals (in a country of 270+ million people) and other subsidies, the rupiah fell as much as 0.4% in a single day, prompting Indonesia’s central bank to intervene to stabilise the currency. Financial markets were essentially firing a warning shot. They view Indrawati as the guardian of fiscal prudence, and any sign that her influence might be sidelined or that spending might spiral is met with anxiety.

This has set up a potential showdown between Prabowo’s expansive social spending agenda and Indrawati’s cautious fiscal approach. Behind closed doors, the technocratic finance minister has reportedly pushed back on some of the more expensive proposals, urging phasing or scaling them down to keep the budget sustainable. Rumours swirled in early 2025 of tensions between the president and his finance minister.

Political gossip even suggested Indrawati might resign rather than sign off on unsound fiscal policies. Prabowo’s own nephew, Thomas Djiwandono, whom Prabowo had installed as a deputy finance minister, could replace her. Such talk hit the news in March 2025, when The Straits Times reported on “whispers” that Indrawati might be replaced.

Whether Indrawati and Prabowo will continue to coexist amicably is a question that markets and Indonesians are watching closely. But if it comes to a true showdown, many believe that one of the region’s most capable finance ministers holds considerable cards. Sri Mulyani Indrawati carries the trust of investors, the respect of Indonesia’s civil society, and the hard-won experience of steering through many storms.

The post Mulyani Indrawati: Indonesia’s go-to crisis fixer appeared first on International Finance.