Sometimes I wonder if SoftBank actually does due diligence. The poster child for bad SoftBank deals was WeWork but there have been quite a few others.
It wouldn't be much more than a curiosity except for the fact Mr. Son et Cie is going to be heading up the $500 billion American AI thingy, Stargate.
From Singapore's Straits Times, January 22:
Indonesian unicorn eFishery allegedly faked most of its sales
Singapore – One of Indonesia’s most prominent start-ups, eFishery, may have inflated its revenue and profit over several years, according to an internal investigation triggered by a whistle-blower’s claim about the company’s accounting.
A preliminary, ongoing probe into the agritech start-up – backed by investors, including Japan’s SoftBank Group and Singapore’s Temasek – estimates that management inflated revenue by almost US$600 million (S$811 million) in the nine months to September in 2024, according to a 52-page draft report circulated among investors and reviewed by Bloomberg News. That would mean more than 75 per cent of the reported figures were fake, the report said.
The company, which deploys feeders to fish and shrimp farmers in Indonesia, was a darling of the nation’s start-up scene and turned unicorn with a valuation of US$1.4 billion when G42, an artificial intelligence firm controlled by the United Arab Emirates royal, Sheikh Tahnoun bin Zayed Al Nahyan, backed its latest funding round. Unicorns are start-ups that reach a valuation of US$1 billion and are not listed on the stock market.
The start-up has raised hundreds of millions of dollars in an attempt to modernise the country’s fish industry, providing farmers with smart feeding devices as well as feed and then buying their produce to sell into the broader market.
Investors were initially enticed by its profitability at a time when layoffs, chief executive officer resignations and plummeting valuations in the tech sector dominated headlines. It presented a US$16 million profit for the first nine months of 2024 to investors, but the investigation commissioned by the board alleges the firm actually generated a US$35.4 million loss.
Revenue for the period was estimated at US$157 million, rather than the US$752 million investors were told, according to the report. Management also inflated revenue and profit numbers for several previous years, the report said.
The report was initiated after a whistle-blower approached a board member with allegations that the accounts were not accurate, according to people familiar with the matter....
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