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SoftBank-Backed Fish Startup Allegedly Faked Most of Its Sales (yahoo.com) 22

Posted by msmash from the rotten-tomatoes dept.
EFishery, one of Indonesia's most prominent startups, may have inflated its revenue and profit over several years, according to an internal investigation triggered by a whistleblower's claim about the company's accounting. Bloomberg News: A preliminary, ongoing probe into the agritech startup, backed by investors including SoftBank and Temasek, estimates that management inflated revenue by almost $600 million in the nine months through September last year, according to a 52-page draft report circulated among investors and reviewed by Bloomberg News. That would mean more than 75% of the reported figures were fake, the report said.

EFishery, which deploys feeders to fish and shrimp farmers in Indonesia, was a darling of the nation's startup scene and scored a valuation of $1.4 billion when G42, an AI firm controlled by United Arab Emirates royal Sheikh Tahnoon bin Zayed Al Nahyan, backed its latest funding round. It has raised hundreds of millions of dollars in an attempt to modernize the country's fish industry, providing farmers with smart feeding devices as well as feed, and then buying their produce to sell into the broader market.

SoftBank-Backed Fish Startup Allegedly Faked Most of Its Sales More | Reply

SoftBank-Backed Fish Startup Allegedly Faked Most of Its Sales

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  • This would lead to jail time in the US, but what is going to happen in Indonesia? (And no, Indonesia is not Saudi Arabia).

  • This all sounds (Score:3)

    by Kiddo 9000 ( 5893452 ) on Tuesday January 21, 2025 @12:04PM (#65106229)
    A little fishy...

  • ...name a more iconic duo. It seems the main question with SoftBank backed ventures is whether they will collapse due to fraud or due to incompetence.

    • I wonder if a person could make money by investing on things they pass over and shorting anything they do put their own money in. Someone did this with Jim Cramer (the TV personality known for shows like Mad Money) and apparently they have a return that's better than market average. Being able to reliably pick failures is in a way almost as good as being able to reliably pick successes.
      • Someone did this with Jim Cramer (the TV personality known for shows like Mad Money) and apparently they have a return that's better than market average.

        There were two ETFs. One went long on what Cramer suggested, the other went short. Both are now closed [yahoo.com] due to lack of interest. The short one was down 15% from launch, compared to a gain of 25% in the S&P during the same time.

    • Re: (Score:2)

      by sodul ( 833177 )

      You focus on the failures. They cast a quite large net (pun intended), so they end up with lesser companies in their portfolio.

      They have plenty enough of profits to absorb this 'fluke':
      https://www.reuters.com/busine... [reuters.com]

      What surprises me is the scale of the fraud on that one. I would expect SoftBank has put some controls, and external audits in place. What I know from interacting with external auditors, is that many of them will be very careful to only ask the least amount of questions so that they find only

    • That's a very hot take on a company which has backed ventures so successful it has turned into one of the largest conglomerates in the world.

      Yeah they've had misses, but they've also had massive hits. You don't get to be that size by failing to the top.

      • You don't get to be that size by failing to the top.

        Trump certainly did:

        Trump Mortgage, LLC - FAILED (Bankrupt)
        Trump Shuttle Inc - FAILED(Bankrupt)
        Trump Steaks - FAILED(Bankrupt)
        Trump Water - FAILED
        Trump Magazine - FAILED
        Trump University - FAILED - Shutdown by State of NY as a "scam"
        The Trump Taj Mahal - FAILED (Bankrupt)
        Trump Castle - FAILED (Bankrupt)
        Trump Plaza Hotel - FAILED
        Trump Vodka - FAILED
        Trump Network - FAILED (Bankrupt)
        Trump Ice - FAILED
        Trump: The Game - FAILED
        Trump Hotels and Casinos Resorts - FAILED - 3 bankrupt casinos
        Trump Entertainment Resor

      • Re: (Score:2)

        by AvitarX ( 172628 )

        I assume they're at the stage where they have too much money to succeed.

        I don't mean this in a negative way, but a lot of investment companies end up with so much money it's hard to spend it all on the great deals.

        Berkshire Hathaway for example owns so much it's basically like an index fund. The medallion fund is basically employee owned because they can't keep their edge with tons of outside money.

        SoftBank probably can't find good investments for all of their money

  • What strikes me as curious(unless the market is enormous or has very high levels of informal/small scale activity) is that you'd even need a whistleblower on the vendor side.

    TFA says that the company was hyping having over 400,000 fish feeders in place; but actually had under 25,000. That's a lot of fish that someone else is feeding; presumably with a lot of feed from other suppliers.

    Is the market something like a billion fish feeders so the discrepancy is smaller in relative terms than it looks in abs

    • Re: (Score:2)

      by nltm ( 10502859 )
      I live in a largely agricultural area of Indonesia - one with a large number of fish and shrimp ponds. It is a very large, and very informal market. Your estimate of a billion fish-feeders is probably too high, but there are certainly hundreds of millions spread across a number of islands stretching from Malaysia to Australia. As with many home-based industries here, there are very few personal financial records, let alone business records. Deals are made verbally, very rarely are there signed contracts b
  • I'm honestly surprised this fraud isn't about the company that uses lasers to burn off parasites off of Salmon in farms. https://www.kvaroyarctic.com/ [kvaroyarctic.com] Maybe it works great - but it has the feel of TED Talk / TechCrunch presentations that look super slick, but have scrambling engineers trying to get even one demo unit to work in the background.

  • It looks like everything everywhere is just a fucking scam now.

    And now it's going to get 1000x worse with the openly corrupt Gropenfurher in office.

  • This gives new meaning to a fish story, or something fishy.

    JoshK.

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