May 13, 2025 • Business, System Development
April 16, 2025 • Business, Case Study • by Gustu Dharma - Sales Marketing at Timedoor
eFishery Startup Fraud: Why Financial Transparency Builds (or Breaks) Public Trust in Business
Table of Contents
Imagine building a business a, an aquatic technology startup like eFishery in this era, a startup you built from scratch, trying so hard to gain media buzz, and then after earning customer and partner or investor, watching your business reputation crumble because of one word: FRAUD .
This is the story of Gibran Huzaifah, ex-CEO of eFishery, whose financial data manipulation scandal shook Indonesia’s startup ecosystem and maybe change the global view on future Indonesian Startups.
How did this happen?
And why is financial transparency the bedrock of public trust?
Let’s dive in.
Part 1: Anatomy of the eFishery Fraud Scandal
A. The Systematic Deception of eFishery Fraud
Source: Bloomberg.com
Bloomberg’s investigation revealed that eFishery — an aquaculture tech startup claiming to empower shrimp farmer’s business — falsified their sales figures and farmer partnerships. Leaked internal data showed 70% of growth claims were baseless.
For examples:
- Farmer Partnerships : eFishery claimed 10,000 farmer partners, but only 30% were active.
- Fake Revenue : The 2023 financial report stated IDR 1 trillion in revenue, but an independent audit revealed only IDR 200 billion.
This wasn’t an accounting error — it was a systematic fraud. Former employees revealed that management actively instructed staff to “beautify” reports with fake data.
B. eFishery Fraud’s Ripple Effects on the Ecosystem
The scandal didn’t just affected eFishery, but also triggered a domino effect in the Startup’s Business Industry:
- Investor Trust Crisis : Foreign investors, including SoftBank, delayed plans to invest in five local startups. This is no joke, when the startup business getting less and lesser investment due to unprofitable business model they adopt to acquire customers.
- Regulatory Shakeup : Indonesia’s Financial Services Authority (OJK) is drafting new rules requiring audits for startups that raising over IDR 100 billion.
- Impact on Farmers : Thousands of farmers who joined eFishery now struggle to access markets due to the collapsed distribution system because before the fall of the company, the fish farmers were promised to be helped to gain customer access through eFishery marketplace system.
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“It’s a little embarrassing, and it’s a shame on the people who have been running eFishery. It is clear that it was all staged, and it was systematic. So it’s really shocking.”
Patrick Walujo (co-founder of Northstar + an early investor in eFishery) at DealStreetAsia’s Indonesia PE-VC Summit 2025
Part 2: Why Financial Transparency is Business’ (or Startup’s) “Oxygen”
A. Investors Want ROI, But Demand Integrity
A Harvard Business Review study found 68% of investors prefer startups with 20% growth but transparency over those claiming 100% growth without data. eFishery failed to grasp this: they focused on Guy Kawasaki-style media hype but neglected the foundational integrity. Once a media darling, now they became a fraudster.
Source: eFishery
Different levels of transparency exist is business, and of course, sharing everything isn’t a very good idea either. For example, trade secrets should be accessible only to a select few (and protected by nondisclosure agreements). Similarly, sensitive information like business bank account balances and customer payment data should be access-restricted and protected. However, there are several areas where sharing information with stakeholders is appropriate and beneficial for future endeavours of the business.
B. Social Media Era: One Scandal, Thousands of Comments
According to The 2023 State of Social Media Report, virtually all business leaders believe social media data and insights have a profound positive impact on top business priorities, including building brand reputation and loyalty (94%) and improving competitive positioning (92%).
If used correctly, social media can help in our favor to build the customer’s and partner’s (or investor’s) trust in business. However, eFishery seems to made it against their favor. In Indonesia, the hashtag #eFisheryFraud trended on X( formerly known as Twitter) for 3 weeks, with 45,000 tweets criticizing the company’s lack of transparency.
This proves that in the digital age, the public is the strongest auditor . Startups can’t rely on PR alone to gain trust — they must share basic financial data like:
- Quarterly cash flow statements.
- Active vs. inactive users.
- Funding breakdowns (including debt).
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C. Seth Godin’s Lesson: Be an Authentic “Purple Cow”
Seth Godin says, “Being boring is the riskiest strategy”. Yet eFishery chose shortcuts. Instead of innovating or building trust through transparency, they faked data and then the eFishery fraud happened.
Purple Cow – Seth Godin
Michael Weinhouse the Founder and Co-CEO of Logical Position mentioned, as scary as the idea of transparency might seem, in the long run, it’s good not only for the customers but also for the business itself. In addition to attracting new customers, transparency allows business to better serve current customer, ensuring they stick around. The trust that has be built with the customers is invaluable.
No matter how great the products or the services might be, customers will look elsewhere if they lose trust in the business. Transparency is a key way of creating trust because it helps eliminate any suspicions or anxieties that the customers might have about the value of what the business is offering. By laying out the truth about your products and services, including their limitations, it will prove that the business aren’t trying to hide any flaws or defects.
Transparency needed in Business (Source: Deloitte)
But building trust through transparency isn’t just about attracting new business. More than that, transparency is about growing customer relationships capable of withstanding difficult challenges. If you’ve been open and honest with your customers from day one, then they’ll be much more likely to keep working with you after setbacks. Rather than interpret a setback as a lack of concern on your part, they’ll be more likely to accept it as unfortunate but understandable and listen to your plan for the future.
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Part 3: Recommendations for Startups Ecosystem (Data-Driven)
A. 3 Steps to Implement Transparency
1. Independent Audits :Partnering with independent auditors such as KPMG, EY, allowing business to build trust with their customers that their business already audited and not making up numbers in their financial reports.
2. Risk Communication :
Don’t just promise “unicorn status” — explain risks like competition or commodity price fluctuation while working with partners and customers.
3. Open Reporting Systems :
Use tools like OpenStartup to share metrics (burn rate, CAC, LTV) in real-time for more transparency and in the end helps building trust from customer, partners, and investors.
B. Government and Regulator Roles
- Mandatory Digital Financial Reports : Startups raising over IDR 50 billion must upload financials to OJK’s platform for more transparency to investors and also customers.
- Incentives for Transparency : Lower taxes or priority access to government incubation programs to boost startup growth, especially that helps with specific problems and helping open a lot of job vacancies.
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So, what’s the takeaway?
While eFishery Fraud case is a bad example of startup financial reporting and transparency, a lot of business or startup doing their best with transparency and integrity doing their works. For startups or business in general, transparency isn’t optional — it’s a must for survival. For the public, demand accountability: ask for data, question narratives, be more critical about the startup business.
Doing our business for more than 10 years, Timedoor can’t survive without communicating risk and being transparent while keeping our integrity. We work with hundreds of different clients on different industries to build their digital presence, helping their operations through digitalization, and optimizing technology to our world.
If you need any help regarding digital and technology, kindly contact us!
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