Frankly Speaking: KWAP’s investment in eFishery in the spotlight
27 Jan 2025, 12:00 pm
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This article first appeared in The Edge Malaysia Weekly on January 27, 2025 - February 2, 2025

Last month, eFishery, a darling of Indonesia’s start-up scene, was reported to have suspended its CEO Gibran Huzaifah and chief product officer Chrisna Aditya, pending an investigation into alleged financial irregularities in the company.

Gibran and Chrisna each held about 9% of the company’s shares.

Last Tuesday, Bloomberg reported that a preliminary, ongoing probe into the agritech start-up estimated that it may have inflated revenue by almost US$600 million in the nine months to September last year. The investigation, commissioned by its board of directors, also found that the start-up had presented to investors a US$16 million profit for the first nine months of 2024 when it actually generated a US$35.4 million loss.

eFishery was co-founded by Gibran and Chrisna in 2013 and had since grown to have a valuation of US$1.4 billion. In 2023, the company was reported to have secured 

US$200 million from its Series D Funding round, making it Indonesia’s latest unicorn. Of this sum, US$47.7 million was from Kumpulan Wang Persaraan (Diperbadankan) (KWAP), according to DealStreetAsia. This amount was in addition to investments from others such as Japan’s SoftBank Group Corp, Singapore’s Temasek and eFishery’s largest shareholder, Aqua-Spark.

Temasek and SoftBank have reportedly declined to comment on the issue. KWAP seems to have followed the same playbook, keeping mum on the probe, its alleged financial irregularities and the pension fund’s investment in eFishery.

With assets under management of close to RM170 billion as at end-2023, KWAP’s investment of slightly over RM200 million may be considered immaterial to the pension fund. Private equity investing is also a risky venture, with the landscape littered with failures.

But investors in start-ups that eventually grow into successful businesses are often well rewarded when they go public or sell their stakes to other investors.

Be that as it may, shouldn’t KWAP, which is tasked with managing the pension fund for retired civil servants, come out to explain the impact of eFishery’s alleged financial irregularities on its investment?

Already, Khazanah Nasional Bhd and Permodalan Nasional Bhd are facing much criticism for their investment in FashionValet Sdn Bhd, after it was revealed that the two government-owned entities lost 

RM43.9 million from the sale of their minority stakes in the fashion e-commerce platform.

With private equity cast in a bad light, the worry is that the same will happen to KWAP’s investment in eFishery.

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