TaniHub and eFishery Scandals Deepen Indonesia's Startup Funding Crisis

Public investment and startup accounts come under scrutiny

About $25 million in investment funds tied to agriculture marketplace TaniHub is at the center of a corruption and money laundering investigation that has reached executives at venture capital units linked to Indonesian state controlled companies. Alongside the collapse of aquaculture startup eFishery, the case is shaking confidence in one of Southeast Asia's largest markets for technology investment.

By September 23, 2025, Jakarta prosecutors had widened their investigation beyond startup founders to the investors who analyzed and approved the use of public money. Detentions began in late July and expanded in early September, putting decisions at TaniHub, MDI Ventures and BRI Ventures under scrutiny.

eFishery faces a different crisis. Investigators reported that it inflated revenue by almost $600 million during the first nine months of 2024 and presented a profit while actually making a sizable loss. The company, which became a unicorn in 2023 after raising $200 million, is now under external management and has been described as no longer commercially viable.

Indonesia's startup sector had already faced more cautious investors since 2022. The two scandals have deepened that caution, slowed fundraising and pushed investors to demand stronger evidence that company accounts match the cash moving through their businesses.

Farmers, lenders, suppliers and employees are also exposed. Unpaid bills, disrupted services and lengthy liquidation or legal proceedings have turned a crisis of investor confidence into a problem for people who depended on these platforms to earn a living or finance their operations.

What prosecutors allege happened at TaniHub

The TaniHub inquiry concerns equity investments made between 2019 and 2023 by MDI Ventures, the venture capital arm of Telkom Indonesia, and BRI Ventures, which is linked to Bank Rakyat Indonesia. Equity investment means putting money into a company in return for an ownership stake.

Prosecutors allege that parts of those investments were approved unlawfully and then siphoned through TaniHub Group and related entities. They are examining whether money was diverted for personal use and fictitious projects. The criminal inquiry includes allegations of corruption and money laundering.

Authorities have detained current and former executives at the venture units and former TaniHub leaders. Those detained from late July included former senior TaniHub figures and an executive at MDI Ventures. By early September, the investigation had expanded to senior figures associated with BRI Ventures and MDI Ventures who analyzed or approved investments.

The inquiry puts the handling of public capital at its center. Executives with influence over substantial funds intended to support innovation face allegations that they approved unlawful disbursements or failed to prevent improper transfers.

For Indonesia, the case is a test of how conflicts of interest and internal controls are policed when money from state controlled groups enters private startups. Responsibility is being examined on both sides of the transaction: the companies receiving the funds and the professionals entrusted with investing them.

How TaniFund became central to the money trail

TaniHub raised $65.5 million in a Series B funding round in 2021, led by MDI Ventures with participation from BRI Ventures. A Series B round generally finances a company that is expanding beyond its earlier development stage.

The group shifted toward selling to other businesses and relied heavily on its lending affiliate, TaniFund, to extend credit through the supply chain. Credit helped customers and suppliers do business before they had the cash to pay, but it also left the group exposed when borrowers failed to repay.

Nonperforming loans accumulated. These are loans on which borrowers are failing to make the required payments. In early 2024, Indonesia's Financial Services Authority, known as OJK, revoked TaniFund's license and ordered its liquidation. Regulators said the affiliate failed to meet prudential rules, which govern financial risk management, and did not repay lenders.

Prosecutors are now tracing whether venture investment money was used to fill losses at the lending affiliate. Whether those transfers occurred remains part of the investigation. Using money intended for business growth to cover delinquent loans would violate investment mandates and mislead investors if it happened.

The concern is straightforward: investors may have supplied money for products, logistics or expansion while the business needed cash to cover earlier lending losses. That possible gap between the approved purpose of the investment and its actual use is central to the public outcry.

eFishery's accounts unravel after its unicorn rise

eFishery built its reputation on smart feeding equipment and data tools for fish and shrimp farmers. Its rise suggested that Indonesian hardware and software could support agricultural productivity, generate profits and bring smaller producers into the digital economy.

The company became a unicorn, a startup valued at more than $1 billion, in 2023 after raising $200 million. In late 2024, investigators reported that revenue for the first nine months of that year had been inflated by almost $600 million. They also reported that the company had presented a profit while actually recording a sizable loss.

The board suspended the cofounders. An external adviser later concluded that the business was not viable on its current footing, and investors now expect to recover only a fraction of their money.

Farmers who purchased equipment or obtained financing through the platform reported disruptions and delayed payments. For those users, the company's financial problems affected services and cash they relied on, not simply the value of shares held by large investors.

The fallout has spread through food and climate technology investing. Businesses in these sectors can operate on thin margins while also extending credit to buyers. eFishery's collapse has forced investors who backed food security and climate related investment strategies to reconsider rapid expansion in physical operations without strong internal controls.

The sequence from investment boom to enforcement

TaniHub and eFishery reached their latest crises through different events, but their timelines show how the current scrutiny followed years of fundraising and expansion. The key dates are:

• 2019 to 2023: The period of TaniHub investments by MDI Ventures and BRI Ventures now being examined by prosecutors.
• 2021: TaniHub raised $65.5 million in a Series B round led by MDI Ventures, with BRI Ventures participating.
• 2022 onward: International and local investors became more cautious about startup funding.
• 2023: eFishery became a unicorn after raising $200 million.
• Early 2024: OJK revoked TaniFund's license and ordered liquidation.
• Late 2024: Investigators reported inflated revenue and hidden losses at eFishery.
• Late July 2025: Detentions began involving former TaniHub leaders and an MDI Ventures executive.
• Early September 2025: The TaniHub inquiry widened to senior figures tied to BRI Ventures and MDI Ventures.

The financing slowdown was already under way before the latest detentions. Industry trackers recorded a sharp fall in Southeast Asian startup deal value across funding stages in 2024. The scandals added concerns about financial reporting and oversight to an already difficult fundraising market.

Why state backed investors face particular pressure

Indonesia relies heavily on corporate venture capital from state controlled groups to finance startups at both early and expansion stages. Over the past decade, MDI Ventures and BRI Ventures became central participants, backing dozens of companies and helping attract foreign investors into funding rounds.

Those investments serve two purposes: seeking financial returns and supporting national ambitions for the digital economy. Because the money comes through state controlled groups, the investors also carry obligations to taxpayers. Failures can therefore lead to public accountability and corruption investigations alongside scrutiny of company governance.

New investment from major venture funds linked to the state has slowed. Public disclosures show a much thinner pace of deals since 2023, with only sporadic activity in 2024 and 2025. The TaniHub investigation has added pressure on the people responsible for approving those commitments.

Investment committees at funds backed by public money are likely to demand tighter controls, while boards will seek independent checks of financial statements before signing investment agreements or transferring cash. That pressure can persist even if courts later narrow or dismiss charges against some individuals.

Public capital remains an important source of startup finance. The governance requirements are demanding: clear investment mandates, visible limits on how proceeds may be used and independent compliance teams. Commercial partnerships within large corporate groups also need to be kept separate from investment decisions so that business relationships do not distort judgments about where money should go.

When a technology platform also becomes a lender

Several troubled Indonesian startups shared a business pattern: they presented themselves as technology platforms, while much of their growth depended on extending credit to customers and suppliers. Giving buyers longer to pay can bring in business quickly, but the platform must finance the wait and bear the risk of nonpayment.

A business selling software has different cash needs from one buying goods, holding inventory and waiting for customers to settle invoices. Some platforms selling to other businesses operated more like trading houses or supply chain finance providers. Their success depended on assessing borrowers and controlling working capital, the cash needed to keep daily operations running.

During a funding boom, new equity can subsidize losses and keep unpaid invoices moving from one period to the next. When funding tightens, those invoices remain unpaid for longer and cash runs down faster. A company can then struggle to meet its obligations even while reporting strong sales growth.

Indonesia's uneven logistics, gaps in financial data and informal market practices can make it difficult to judge whether customers will repay. Pressure to expand rapidly enough to become viable can also tempt management teams to dress up figures or delay recognizing losses.

Platforms that extend credit therefore need controls suited to a financial business: strict lending policies, independent reviews of risk, daily monitoring of available cash and clear disclosure of how investment money is spent. Product growth and user numbers cannot replace the ability to collect payments.

Other investigations deepen the pressure

Fintech lenders Investree and KoinWorks have also faced investigations or regulatory action. Logistics company SiCepat faced allegations that a former executive diverted funds. These cases have widened concern beyond agriculture and aquaculture startups.

Former Gojek chief and former education minister Nadiem Makarim was detained in 2025 as prosecutors examined a school laptop procurement project carried out during his time in government. That inquiry concerns public procurement rules rather than venture investment, but it has added to public demands for accountability in technology related programs.

Credit exposure runs through many of the businesses under pressure. A platform that lends, arranges financing or allows long payment periods must manage repayment risk alongside its technology and commercial operations. Weak oversight in any of those activities can leave customers, suppliers and investors exposed.

OJK has revoked licenses and ordered liquidations at firms that breach prudential requirements. Its action against TaniFund in 2024 showed the consequences for lending businesses that fail to manage credit risk and meet their obligations.

Investors demand evidence before releasing cash

Investors who once prioritized speed are asking for more frequent financial updates, stronger contractual protections and audit confirmations before releasing money. New funding rounds take longer, and the threshold for further investment has risen most for companies exposed to inventory, unpaid customer bills and lending built into their services.

Some funds are dividing investments into installments released when agreed milestones are met, keeping more capital in reserve rather than transferring it immediately. Investors are also seeking rights to inspect bank statements and tax filings during a funding round.

Boards are requesting independent directors earlier, experienced chief financial officers and internal audit functions as companies approach Series B. Some corporate venture units are separating commercial partnerships from investment decisions to reduce conflicts inside their parent groups.

Indonesia remains attractive to foreign investors because of its scale and digital adoption. Their focus is shifting toward sustainable unit economics, meaning whether each sale or customer relationship makes financial sense, and cash conversion, meaning how quickly reported sales become money the company can use.

Strong teams can still attract funding, but they face demands for verified figures, better controls and clearer routes to profitability. Honest founders have also suffered during 2024 and 2025 as capital became harder to obtain for reasons beyond their control.

Protecting people while rebuilding confidence

Indonesia's venture capital industry association has expressed concern, pledged support for law enforcement and encouraged members to improve accountability, transparency and education for founders and investors. Enforcement and industry standards can work together to improve disclosures, board oversight and risk management.

Regulators face the task of protecting consumers and investors while keeping room for innovation. Clearer rules for businesses that combine lending with commerce or logistics, faster resolution of distressed platforms and public reporting of enforcement outcomes would make obligations and consequences easier to understand. Predictable rules and consistent enforcement would also help businesses that operate responsibly.

Farmers supplying goods, lenders financing working capital and employees who accepted stock options can all lose when a platform collapses. Stronger escrow arrangements, in which funds are held separately for an agreed purpose, and separation of customer balances from company operating money can reduce exposure. Basic supply chain protections, transparent payment terms and clear dispute procedures can also help smaller businesses.

Platforms can build trust by publishing payment punctuality figures, claims data and audit summaries. Keeping financing activities separate from core operations, retaining sufficient capital to absorb losses and disclosing transactions with related people or businesses early would make it easier for partners and investors to assess risk.

Founders seeking to restore confidence can take concrete steps:

• Hire experienced finance leaders early and give internal auditors the authority to examine problems.
• Issue quarterly investor updates that reconcile cash, revenue and money owed by customers.
• Use investment proceeds only for board approved purposes and document every transfer.
• Separate lending from commerce or software operations and establish clear risk policies.
• Use reputable external auditors and rotate audit partners regularly.
• Set payment terms around realistic collection times rather than expectations of another fundraising round.
• Appoint independent directors before Series B and establish a strong audit committee.
• Conduct surprise checks of inventory, customer balances and transactions involving related parties.

These measures address the practical problem running through the crisis: investors and customers need reliable accounts, a clear view of where money goes and confidence that payment obligations can be met.

The Bottom Line

• The TaniHub investigation concerns about $25 million tied to investments made between 2019 and 2023 and includes corruption and money laundering allegations.
• Detentions have reached former TaniHub leaders and current or former executives associated with MDI Ventures and BRI Ventures.
• OJK revoked TaniFund's license in early 2024. Prosecutors are examining whether venture investment money covered lending losses.
• Investigators reported that eFishery inflated revenue by almost $600 million in the first nine months of 2024 and concealed a sizable loss.
• eFishery is under external management, and an external adviser judged the business unviable on its current footing.
• Southeast Asian startup funding fell sharply in 2024, while investors now demand more checks and tighter conditions.
• Farmers, suppliers, lenders and workers face consequences alongside investors, making payment protection and credible financial controls central to restoring trust.