JAKARTA (Bloomberg): Vincent Tjendra and Marcella Moniaga spent most of this year trying, and failing, to raise fresh capital for Astro, their quick-commerce startup in Indonesia.
Meeting after meeting, the duo felt a growing aversion from investors. A prolonged funding crunch and a full-blown scandal earlier this year at agritech venture eFishery, another Indonesian startup, meant a narrowing of possibilities for entrepreneurs.
But by fall, Tjendra noticed some investors starting to show interest in Astro. A breakthrough finally came in September, when Amazon.com Inc. agreed to invest $51.9 million - the largest single equity check any Indonesian startup has received this year. Though that valued Astro about 30% below its last funding round, Tjendra still saw it as a win.
"We’re building for the long term,” Tjendra told Bloomberg News. "A down round is just one blip.”
Many founders have drawn the same lesson: restraint now carries more weight than inflated promises in the aftermath of the eFishery scandal.
They are opting for frugality, prioritizing revenue over the constant hunt for new backers, and even weighing investor buyouts, according to Rama Mamuaya, a partner at Indonesia-focused VC firm DSX Ventures and the vice-chairman at the Indonesia VC Association for Startups.
"After the news of eFishery broke, many funding rounds were postponed,” Mamuaya said. "The breakdown of trust was one of the key factors that shaped the decision for many investors to slow things down in order to do more due diligence and checks.”
On paper, eFishery had everything a startup could dream of: a $1.4 billion valuation, an agreeable business plan wrapped in save-the-world ideas, and backing from marquee investors including Japan’s SoftBank Group Corp., and Singapore’s Temasek Holdings Pte.
Yet its co-founder Gibran Huzaifah faked the numbers, misreporting both revenue and profits. Roughly $300 million in investor money is still unaccounted for.
Gibran’s account in a March interview with Bloomberg News traced a familiar arc: weak management and a near-total absence of financial controls. But the full picture was bigger than one company’s failures. His "fake it till you make it” deceptions collided with a market already shaken by the 2022 downturn, political uncertainty, and serial missteps across the sector. The result was a broader reset, sparking signs of a lasting change in how founders and investors operate in Indonesia.
Police detained Gibran and two former executives in May. According to Ade Safri Simanjuntak, director of special economic crimes at the National Police’s Criminal Investigation Agency, the probe into Gibran’s case has been completed and the report has been handed over to prosecutors. Neither Gibran nor an eFishery lawyer responded to requests for comment.
In early September, senior officials at state-backed investors MDI and BRI Ventures were taken into custody in a graft and money-laundering probe tied to their investments in TaniHub, another scandal-hit agritech startup.
While prosecutors have alleged financial misconduct, the court has yet to reach a verdict. The series of arrests prompted the venture arms of government-linked Telkom and BRI, as well as Central Capital Ventura, a funding unit of privately owned Bank Central Asia, to try and sell their stakes in startups at discounts, according to people familiar with the matter.
The three firms did not respond to requests for comment. Grant Thornton’s local unit, the auditor of eFishery’s Indonesian operations for 2022, has exited the firm’s global network. Declining to go into specifics, a spokesperson said the auditing giant is now looking for "a new member firm” to resume work following its "separation” from the previous partner.
Singapore’s investment company Temasek has pulled back from early-stage deals. Private equity isn’t immune either: Northstar Group, one of eFishery’s earliest investors, sold several funds to US-based Ares Management this year in a $6 million fire sale.
"The bar for investing is much higher,” said Sang Han, a partner at East Ventures, a leading investing firm in Indonesia. "Investors are doing broader legal and financial diligence, running multiple reference checks, and focusing on realistic valuations and operational metrics.”
Indonesian startups have raised only about $80 million in the first half of this year - a sharp decline from the $200 million recorded during the same period in 2024 and nowhere near the $9.44 billion raised in 2021, according to a report by Kickstart Ventures and DealStreetAsia.
Shaken by eFishery’s fallout, five venture capital associations in Southeast Asia have drawn up what they call a "maturation map” - a framework meant to press investors to exercise real diligence, prepare promising startups for IPOs, and help the struggling ones exit the market gracefully.
"Funding may have fallen since 2021, but VCs are still sitting on dry powder, and good companies continue to be able to fundraise,” said Joel Shen, a partner at law firm Withers and head of its Indonesia practice. "Valuations are now rational and, instead of chasing vanity metrics and ever-higher valuations, founders are building with greater discipline.”
Authorities are also trying to steady the mood. In early October, the Indonesian Ministry of Investment reduced the minimum paid-up capital for foreign investment companies from IDR 10 billion (about $600,000) to IDR 2.5 billion per business activity.
Shen said the move gives local startups leeway to tap foreign capital and set up offshore businesses. The latter makes them more appealing to overseas investors.
"This comes at an opportune time, especially for early stage Indonesian startups that are looking to raise their first institutional round,” said Shen.
Local venture firm Alpha JWC has launched a platform that lets founders, employees, and other stakeholders report misconduct independently and in confidence.
The effort is another reflection of the shift prompted by eFishery’s collapse: for industry watchers, a balance-sheet manipulation crafted by Gibran and masked through a web of shell companies came as a shock, since the company had all the trappings of an imminent IPO. That facade held until a whistleblower exposed the fraud in late November last year.
Jefrey Joe, Alpha JWC’s managing partner, told Bloomberg News that more than 50% of fraud is uncovered through whistleblowing. The goal of the initiative, he said, is simple: assurance for investors, credibility for founders. "Once trust is settled, we can focus on what matters: your growth plan, your business fundamentals.”
During the boom years, founders and investors operated in the same echo chamber. Both sides talked up Indonesia’s expanding middle class- tens of millions of consumers - and poured money into capturing them through discounts, cashbacks, and other incentives.
Abraham Viktor, co-founder and CEO of cloud kitchen firm Hangry, recalls when crossover funds from public investors, hedge funds and private equity flooded the market, making it hard to tell whose money was going where.
Fast forward to 2025: most of those players have since pulled back, leaving behind a smaller pool of financiers. Viktor sees it as a healthy sign. "It was not helpful for any company to have raised money at such lofty valuation multiples,” he said. "I think it just means companies have to work harder to create shareholder value.”
Indonesia’s middle class has also shrunk. About 9.5 million people have slipped out of it in the past five years, according to the national statistics agency. The next battleground is the 70% who live on less than $10 a day. And the companies gaining traction now are the ones making products affordable for lower-income consumers.
When Yoshua Tanu co-founded Jago Coffee with his distant cousin, Christopher Oentojo, in 2020, they sent out three-wheeler carts equipped with coffee machines and good beans, and sold each cup for $1.20. That wasn’t enough to attract price-conscious customers, so they brought it down to 60 cents. To keep the business lean, they limited themselves to mobile carts located through their smartphone app, cutting out the costs of running brick-and-mortar shops.
Jago’s survival hints at changing attributes of Indonesia’s entrepreneurial success. When investor money slowed and eFishery’s collapse rattled the startup world, knowing who their customers were - gig workers, security guards, young office staff, anyone looking for a cup of coffee on the go - helped them stay in business.
"Our true middle class is essentially the mass market, the ones that earn that minimum wage,” said Tanu, who’s now Jago Coffee’s chief executive officer.
--With assistance from Chandra Asmara. -- ©2025 Bloomberg L.P.
