A stock board at the Indonesia Stock Exchange (IDX) in Jakarta, Indonesia, on Friday, Jan. 2, 2026. Indonesia will pull back 75 trillion rupiah ($4.49 billion) of government cash it had planned to park in state-owned banks, citing the initiative's limited impact on boosting lending in Southeast Asia's largest economy. Photographer: Dimas Ardian/Bloomberg
JAKARTA: Indonesia’s startup ecosystem spent last year in a crisis of trust, shaken by high-profile frauds and their aftershocks that chilled investor appetite and deepened the country’s private funding slump.
Industry players and experts said the scandals have forced investors to tighten scrutiny through more forensic due diligence, and, in some cases, to overhaul their investment mandates.
From the unravelling of agritech unicorn eFishery saga to corruption probes ensnaring venture capital executives tied to state-backed funding at fellow agritech firm TaniHub, alongside alleged misconduct cases at fintech platforms including Investree, KoinWorks and Crowde, the year exposed lax oversight and intentional deception that stripped the gloss from South-East Asia’s most coveted start-up market.
“They’ve definitely impacted trust in the short term and created reputational drag for the ecosystem,” Roderick Purwana, managing partner at venture capital firm East Ventures, told The Jakarta Post.
The changes, he added, were not driven by a sudden fear among investors. “Our risk appetite is intact, but the bar is higher.”
Roderick said investors had intensified due diligence, making it “deeper and more forensic” following a string of exposés earlier in the year.
Financial controls, revenue quality, related-party exposure and cash discipline are now scrutinised earlier in dealmaking, alongside tighter governance checks.
“Capital is still available,” Roderick emphasised, but it is being deployed far more selectively, “which is how a healthy ecosystem should behave.”
Indonesia attracted less than US$80mil in private funding in the first half of last year, compared with about US$200mil in the same period in 2024, according to an annual report by Google, Singapore’s Temasek and United States-based research firm Bain & Co.
Funding in 2024 totalled about US$400mil, marking a roughly 95% collapse from the 2021 peak of US$9.1bil across 649 deals.
The shock was most acute in the fourth quarter of 2024, when year-on-year funding fell by about 90% amid fallout from the eFishery scandal, said Rama Mamuaya, deputy chair of the Indonesian Venture Capital Association for Start-ups.
The eFishery saga erupted in late 2024, when a whistleblower’s complaint triggered an internal probe that uncovered long-running inflated revenue and profit figures, shaking the country’s start-up ecosystem.
Once valued at US$1.4bil and backed by Temasek and Japan’s SoftBank Group, the company built automated feeding systems for fish and shrimp farmers and raised hundreds of millions of US dollars in funding, turning it into Indonesia’s latest unicorn in 2023.
Co-founder Gibran Huzaifah in March admitted to falsifying financial data, with roughly US$300mil in investor funds unaccounted for.
Furthermore, the police’s Criminal Investigation Department later detained Gibran and two former executives in August.
“After the news of eFishery broke, many funding rounds were either postponed or delayed,” Rama said, “which shows how substantive the impact was.”
The damage deepened in September, when senior executives at state-backed investors MDI Ventures and BRI Ventures were detained in a graft and money-laundering probe tied to their investments in TaniHub, a now-defunct agritech start-up once valued at US$200mil.
Prosecutors alleged irregularities and breaches of investment rules in US$25mil of funding channelled into TaniHub and its fintech affiliate, TaniFund, between 2019 and 2023 by the venture arms of state-owned enterprises (SOEs) PT Telkom Indonesia and PT Bank Rakyat Indonesia.
Rama said the case prompted state-owned venture capital firms to scale back investments in local start-ups, a move that private investors quickly took as a signal.
“If SOEs don’t want to invest in local start-ups because the risk doesn’t make sense, foreign investors will ask the same question,” Rama noted.
“It sends a very bad signal when even the government isn’t willing to take that risk.”
Several investment firms subsequently shifted their mandates, moving capital to “more promising” markets such as Vietnam and the Philippines, pivoting toward non-tech sectors or transitioning into broader investment management, Rama added.
Temasek sharply reduced early-stage investments after a wave of high-profile losses, including its exposure to eFishery, the Financial Times reported last July.
Singapore-based private equity firm Northstar Group, one of eFishery’s earliest backers, sold three funds to US-based Ares Management in August, which has since assumed control of the company.
Ajisatria Suleiman, an associate at the Centre for Indonesian Policy Studies, said the pullback in venture capital reflected deeper structural issues rather than fraud alone.
“Fraud happens everywhere, not just in Indonesia,” Ajisatria told the Post. “In markets with better exit opportunities, private funding has continued to flow despite scandals.”
“From what I see, there just aren’t many start-ups with scalable growth and a clear path to profitability,” he added.
He noted that clear law enforcement outcomes, including restitution, “would be critical to restoring confidence”.
Indonesia produced no new unicorns last year, as was also the case in 2024, but one startup made it to the public market.
Fore Coffee, a tech-enabled coffee chain founded in 2018, listed its shares in April with a market capitalisation of US$103mil.
“In periods like this, trust is rebuilt through outcomes.
“Fore’s listing showed what disciplined execution and governance can unlock value,” said East Ventures’ Roderick, one of the company’s backers.
Still, he added, listing windows for tech companies this year would depend on global interest rates, liquidity conditions and the readiness of the respective companies. — The Jakarta Post/ANN
