DISASTERS just keep on coming—totally unbelievable. This company raised a MASSIVE $200 million and now very serious allegations: “financial misreporting” of performance & revenue. I know a lot more (believe me), but I can’t say it all—don’t need any lawsuits Big, big names on the cap table—Temasek, SoftBank, Argor—some of the biggest in the world. Early warning signs? CFO resigned out of nowhere, cash vanishing. They blamed junior staff. Some say it’s all connected… (not me, of course!) This is a major blow to Asia’s VC scene. They needed a big win, got a big mess instead. Only 2 new unicorns in 2023 and eFishery was one. Now this. Could we have prevented it? Hard to say. Some of our investor clients are active in Indonesia, India, Thailand—tough markets. Things we automate easily in the U.S. are done manually there. Need very good auditors but hard to find. Not easy! We NEED to stop this nonsense. Someday we’ll laugh about how easy it was to fudge the numbers and take investors cash. Smart people, better software & data—that’s the future. Asia will take longer but we HAVE to fix this
I have recently posted about a startup that wasted €100m. Founders bought houses and cars and investors even provided a bridge round. On top of that hundreds of employees became unemployed. What are Founders doing now? They are in Dubai building the same thing under a different name.
At some point, when everyone is a unicorn, you’ve got to start wondering if someone isn’t just running around gluing horns on horses. Or in some cases a donkey 🫏.
The eFishery case serves as a reminder of the importance of transparency and accountability in the startup world. While allegations of financial reporting errors still need further investigation, this incident highlights the need for strict due diligence from investors, the role of independent and high-quality auditors, and the implementation of technology to prevent data manipulation. A collaborative effort from all stakeholders, including regulators and the startups themselves, is essential to create a healthy, transparent, and sustainable startup ecosystem.
Both VCs and entrepreneurs in the region spend very little time thinking about governance and back of house policies, processes & practices. It’s all about viral growth and front office operations. Most SEA startups are Potemkin villages: great facades, but vapor behind the scenes.
This is the dark side of VC where expectations were so high (as shown in the valuation) while the reality is just not there to catchup with the funding game.......agriculture is never a high growth business really.
Victor Lang Calls for independent quarterly due diligence from external teams not related to the investors in any which way and with absolute zero conflict of interest. The committee of investors or the Board could have done this very early on to identify if something was off. Everyone wants that quick buck hence resulting to these, blame the investors equally for not ensuring enough DD is done.
Rumors are that more stories are still coming. When it rains it pours.
Sorry to say this , but i have to be honestly blunt. Some startup is like a legitimate money game. Same same but the same. If an app can do some form of due dilligence red flagging ...why not.
What do VCs need? Another VC as an auditor who actually knows what to audit.
MBA-BI I Entrepreneur I Investor I Kauffman Fellow Techstars | Founder Institute Mentor
3dHow long does it take for a board to check the financial information of the company? Investors are also lazy in preventing this type of disaster.