1 00:00:00,240 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:08,640 --> 00:00:12,879 Speaker 2: Five years after launching his tech company in Indonesia, Gabron 3 00:00:12,920 --> 00:00:17,960 Speaker 2: Huseeifa found himself in deep money trouble. The startup he built, 4 00:00:18,040 --> 00:00:21,200 Speaker 2: E Fishery, that lets farmers feed fish from their phones, 5 00:00:21,480 --> 00:00:25,520 Speaker 2: was just three months away from running out of cash. 6 00:00:26,120 --> 00:00:29,520 Speaker 1: This company had less than nine thousand US dolars in 7 00:00:29,600 --> 00:00:33,400 Speaker 1: its accounts. It had been trying to raise money unsuccessfully 8 00:00:33,680 --> 00:00:36,840 Speaker 1: from the region's biggest and smallest investors. 9 00:00:37,520 --> 00:00:41,000 Speaker 2: David Ramley is a Bloomberg investing reporter based in Singapore, 10 00:00:41,440 --> 00:00:44,360 Speaker 2: and Gabron told David and a team of Bloomberg reporters 11 00:00:44,520 --> 00:00:47,800 Speaker 2: that back then in twenty eighteen, his company's one hundred 12 00:00:47,800 --> 00:00:51,280 Speaker 2: employees were counting on him, and he felt he couldn't 13 00:00:51,320 --> 00:00:54,440 Speaker 2: let his company go bust. On top of that, he 14 00:00:54,640 --> 00:00:57,960 Speaker 2: actually believed he had a good business. He just needed 15 00:00:58,080 --> 00:01:02,080 Speaker 2: more money and time to grow. But where was he 16 00:01:02,160 --> 00:01:05,360 Speaker 2: going to find the money? Gabron told Bloomberg he spent 17 00:01:05,400 --> 00:01:08,800 Speaker 2: a long time just staring at an Excel spreadsheet of 18 00:01:08,840 --> 00:01:12,760 Speaker 2: E Fishery's finances on his laptop. He thought long and 19 00:01:12,840 --> 00:01:14,640 Speaker 2: hard about what he could do. 20 00:01:15,840 --> 00:01:18,160 Speaker 1: What he started to do very slowly at first was 21 00:01:18,160 --> 00:01:19,920 Speaker 1: he just started to play with the numbers. It was 22 00:01:19,920 --> 00:01:22,520 Speaker 1: almost the thought experiment. He just started tweaking the numbers 23 00:01:22,560 --> 00:01:25,440 Speaker 1: to what he thought investors would want to see. 24 00:01:25,480 --> 00:01:29,160 Speaker 2: And once he started, he just kept going. Within an hour, 25 00:01:29,319 --> 00:01:32,440 Speaker 2: he had done what years of hard work couldn't turn 26 00:01:32,520 --> 00:01:36,080 Speaker 2: his business into a winner, at least on paper. He 27 00:01:36,160 --> 00:01:38,200 Speaker 2: hit the send button to show his investors and he 28 00:01:38,319 --> 00:01:45,039 Speaker 2: was certain he'd get caught. Only he didn't. 29 00:01:46,360 --> 00:01:50,320 Speaker 1: Actually, what happened was his existing investors were extremely excited, 30 00:01:50,840 --> 00:01:54,160 Speaker 1: while the others who had previously said but not really interested, 31 00:01:54,280 --> 00:01:57,480 Speaker 1: was suddenly extremely keen. He went from being someone that 32 00:01:57,560 --> 00:02:00,480 Speaker 1: no one wanted to being someone who was how did 33 00:02:00,560 --> 00:02:04,440 Speaker 1: for investment opportunities in the space of a few months 34 00:02:04,880 --> 00:02:06,160 Speaker 1: thanks to that one spreadsheet. 35 00:02:06,800 --> 00:02:10,440 Speaker 2: So Gabron kept on faking the numbers year after year, 36 00:02:10,800 --> 00:02:15,200 Speaker 2: and investor's money kept rolling in. By twenty twenty three, 37 00:02:15,400 --> 00:02:18,320 Speaker 2: E Fishery had become one of the hottest startups in 38 00:02:18,360 --> 00:02:21,480 Speaker 2: Southeast Asia. It was valued at more than a billion 39 00:02:21,560 --> 00:02:24,160 Speaker 2: dollars and had raised millions from some of the world's 40 00:02:24,200 --> 00:02:29,200 Speaker 2: biggest money managers, including SoftBank, Sequoia India and Southeast Asia, 41 00:02:29,240 --> 00:02:33,840 Speaker 2: and Singapore's State investor Temasek, but the more money he got, 42 00:02:34,200 --> 00:02:36,160 Speaker 2: that bigger his lies became. 43 00:02:36,960 --> 00:02:39,560 Speaker 1: Once he tweaked the numbers, everything looked good on paper, 44 00:02:39,600 --> 00:02:42,000 Speaker 1: but the reality was he still didn't have those numbers, 45 00:02:42,040 --> 00:02:44,760 Speaker 1: so he had to come up with them. What happens 46 00:02:44,840 --> 00:02:49,240 Speaker 1: is the claims become too big and the expected growth 47 00:02:49,280 --> 00:02:51,480 Speaker 1: becomes too big for that method to work. 48 00:02:52,680 --> 00:02:57,000 Speaker 2: Gabron's house of cards eventually came crashing down after a 49 00:02:57,000 --> 00:03:01,920 Speaker 2: whistleblower report last November blew apart his entire scheme. Some 50 00:03:02,040 --> 00:03:07,960 Speaker 2: top investors lost hundreds of millions of dollars. A subsequent 51 00:03:08,040 --> 00:03:10,800 Speaker 2: internal investigation found that in the first nine months of 52 00:03:10,800 --> 00:03:14,240 Speaker 2: twenty twenty four, E Fishery claimed revenues of more than 53 00:03:14,280 --> 00:03:17,920 Speaker 2: seven hundred and fifty million dollars, while the true number. 54 00:03:17,840 --> 00:03:18,960 Speaker 1: Was just a fifth of that. 55 00:03:20,200 --> 00:03:23,880 Speaker 2: David and his colleagues spoke to over twenty e Fishery investors, 56 00:03:24,080 --> 00:03:28,040 Speaker 2: staff and clients, and Gibraun himself to piece together this 57 00:03:28,240 --> 00:03:29,640 Speaker 2: insider account. 58 00:03:29,880 --> 00:03:33,240 Speaker 1: I wanted to know what made this guy go from 59 00:03:33,320 --> 00:03:37,680 Speaker 1: being a relatively honest Phish farmer slash student to someone 60 00:03:37,720 --> 00:03:41,640 Speaker 1: who had cost investors hundreds of millions of dollars while 61 00:03:41,760 --> 00:03:46,680 Speaker 1: still living a relatively modest lifestyle. He doesn't have private jets. 62 00:03:46,920 --> 00:03:50,440 Speaker 1: He's driving a Hyundai Ionic five. What we're trying to 63 00:03:50,480 --> 00:03:53,120 Speaker 1: find out is how did he do it? But the 64 00:03:53,120 --> 00:03:55,000 Speaker 1: big question I thought was why. 65 00:03:57,640 --> 00:04:00,720 Speaker 2: This is the big take Asia From Bloomberg News. I'm Wanha. 66 00:04:01,240 --> 00:04:03,600 Speaker 2: Every week we take you inside some of the world's 67 00:04:03,640 --> 00:04:07,400 Speaker 2: biggest and most powerful economies and the markets, tycoons and 68 00:04:07,520 --> 00:04:11,800 Speaker 2: businesses that drive this ever shifting region. Today in the 69 00:04:11,840 --> 00:04:15,720 Speaker 2: show The Rise and Fall of e Fishery, how did 70 00:04:15,760 --> 00:04:19,080 Speaker 2: a young entrepreneur from Indonesia create such a headache for 71 00:04:19,200 --> 00:04:22,160 Speaker 2: some of the biggest investors in the world and what 72 00:04:22,200 --> 00:04:24,920 Speaker 2: does it say about the risks of venture capital investing 73 00:04:25,080 --> 00:04:34,080 Speaker 2: in Southeast Asia. Gibron Huzaifah was raised near the slums 74 00:04:34,120 --> 00:04:36,760 Speaker 2: of East Jakarta. He's the son of a homemaker and 75 00:04:36,800 --> 00:04:39,880 Speaker 2: a construction worker. He did well in high school and 76 00:04:39,920 --> 00:04:43,360 Speaker 2: went on to study biology at the Bundum Institute of Technology, 77 00:04:43,720 --> 00:04:47,719 Speaker 2: known locally as the MIT of Indonesia, and that's where 78 00:04:47,760 --> 00:04:49,799 Speaker 2: he picked up interest in aquaculture. 79 00:04:50,480 --> 00:04:53,200 Speaker 1: The reason why he took an aquaculture class is because 80 00:04:53,240 --> 00:04:56,839 Speaker 1: he heard the lecturer gave easy a's that's it. He 81 00:04:56,880 --> 00:04:59,960 Speaker 1: wanted an easy credit on his transcript, so he signed up. 82 00:05:00,560 --> 00:05:04,120 Speaker 1: But he actually got inspired, in his words, inspired by 83 00:05:04,120 --> 00:05:07,680 Speaker 1: the story of aquaculture in Indonesia and its potential. 84 00:05:08,400 --> 00:05:11,800 Speaker 2: Indonesia is the third largest seafood producer in the world, 85 00:05:11,960 --> 00:05:15,880 Speaker 2: after China and India. The fishery sector was worth around 86 00:05:15,920 --> 00:05:19,400 Speaker 2: twenty seven billion dollars in twenty twenty one, that's according 87 00:05:19,440 --> 00:05:23,640 Speaker 2: to a World Bank report. And young Gebron saw an opportunity. 88 00:05:25,440 --> 00:05:28,400 Speaker 1: He wanted to be the Raja Leile, the king of 89 00:05:28,480 --> 00:05:33,400 Speaker 1: catfish in Indonesia, and so he hustled. He started speaking 90 00:05:33,440 --> 00:05:37,360 Speaker 1: with people who had hundreds of fish ponds and were 91 00:05:37,360 --> 00:05:40,200 Speaker 1: pretty big in the industry, and he asked them like, 92 00:05:40,240 --> 00:05:42,320 Speaker 1: what do you need? What is the issue? And they said, 93 00:05:42,320 --> 00:05:44,400 Speaker 1: you know, at some point, as you get bigger, your 94 00:05:44,440 --> 00:05:49,480 Speaker 1: issue becomes feeding the fish. Because feeding fish requires both 95 00:05:49,760 --> 00:05:53,560 Speaker 1: regularity as well as precision, and you need big farms. 96 00:05:53,600 --> 00:05:55,440 Speaker 1: It takes a long time to get from one side 97 00:05:55,520 --> 00:05:57,800 Speaker 1: to the other. It'd be great if I had a 98 00:05:57,839 --> 00:05:59,359 Speaker 1: machine that could do that for me. 99 00:06:00,480 --> 00:06:03,320 Speaker 2: So Gabron went off and made a prototype of an 100 00:06:03,360 --> 00:06:08,120 Speaker 2: automated fish feeder. The initial machine was scrappy. Imagine an 101 00:06:08,160 --> 00:06:12,000 Speaker 2: old school milkcan upside down with a spinner that's actually 102 00:06:12,040 --> 00:06:16,400 Speaker 2: a retrofitted CD player, spitting out fish food. For months, 103 00:06:16,400 --> 00:06:20,560 Speaker 2: Gabron traveled across Indonesia to rural villages trying to sell 104 00:06:20,600 --> 00:06:21,360 Speaker 2: his machine. 105 00:06:21,760 --> 00:06:24,359 Speaker 1: He had the early prototype strapped to the back of 106 00:06:24,360 --> 00:06:28,160 Speaker 1: a motorbike and he would take that down various lanes 107 00:06:28,279 --> 00:06:31,600 Speaker 1: to the ends of nowhere and rural farms, going from 108 00:06:31,640 --> 00:06:34,599 Speaker 1: farm to farm trying to sell that machine to people. 109 00:06:35,400 --> 00:06:40,280 Speaker 2: His persistence paid off slowly, some farmers began buying or 110 00:06:40,320 --> 00:06:45,120 Speaker 2: renting the machines. Meanwhile, Gabron enrolled himself into multiple startup 111 00:06:45,160 --> 00:06:48,720 Speaker 2: competitions in Jakarta, which gave him access to the venture 112 00:06:48,800 --> 00:06:51,839 Speaker 2: capital community, and that paid off too. 113 00:06:52,240 --> 00:06:56,400 Speaker 1: His first pre Series A investments came from a highly 114 00:06:56,520 --> 00:07:02,520 Speaker 1: niche Dutch aquaculture specific and investment firm called Aquaspark, as 115 00:07:02,520 --> 00:07:05,840 Speaker 1: well as a local VC. The entirety of the pre 116 00:07:06,000 --> 00:07:09,000 Speaker 1: Series A was just seven hundred and fifty thousand US dollars. 117 00:07:12,800 --> 00:07:17,280 Speaker 2: The money wasn't enough. The company was burning through cash. 118 00:07:17,600 --> 00:07:21,360 Speaker 2: Investors weren't buying Gabron's pitch for new funds, so he 119 00:07:21,440 --> 00:07:25,040 Speaker 2: went back to the well to his first investor, Aquaspark. 120 00:07:25,840 --> 00:07:29,880 Speaker 1: Aquaspark believed in the model enough that they were willing 121 00:07:29,960 --> 00:07:33,040 Speaker 1: to stump up one point five million dollars for his 122 00:07:33,120 --> 00:07:36,840 Speaker 1: Series A round, but it came with caveats. The first 123 00:07:36,880 --> 00:07:39,200 Speaker 1: two thirds of the money would be sent over, but 124 00:07:39,240 --> 00:07:42,320 Speaker 1: the last one third, five hundred thousand dollars wouldn't be 125 00:07:42,360 --> 00:07:44,800 Speaker 1: sent unless he could find other investors for the rest 126 00:07:44,800 --> 00:07:45,280 Speaker 1: of the round. 127 00:07:46,080 --> 00:07:49,360 Speaker 2: But how would he convince those other investors. They had 128 00:07:49,400 --> 00:07:54,080 Speaker 2: all turned him down already. When Gabron asked other Indonesian entrepreneurs, 129 00:07:54,320 --> 00:07:58,200 Speaker 2: he got answers that were vague and coded. Gabron says, 130 00:07:58,240 --> 00:08:01,360 Speaker 2: the way he heard it, the tip was essentially to 131 00:08:01,480 --> 00:08:02,600 Speaker 2: fudge the numbers. 132 00:08:04,200 --> 00:08:07,600 Speaker 1: In twenty eighteen, as he's facing the conundrum between basically 133 00:08:07,640 --> 00:08:11,120 Speaker 1: losing everything in his eyes or fudging the numbers like 134 00:08:11,200 --> 00:08:14,280 Speaker 1: everyone else he speaks to in his community, and providing 135 00:08:14,680 --> 00:08:18,560 Speaker 1: exactly what the investors want to see, continuation growth and 136 00:08:18,640 --> 00:08:21,960 Speaker 1: a poff to actually making a sustainable business, he chose 137 00:08:22,000 --> 00:08:22,360 Speaker 1: the letter. 138 00:08:23,520 --> 00:08:28,400 Speaker 2: Gabron was sure he'd get caught, except he didn't. Investors 139 00:08:28,440 --> 00:08:31,560 Speaker 2: were keen to come on board. In the end, the 140 00:08:31,600 --> 00:08:35,280 Speaker 2: Series A round was a huge success. The company raised 141 00:08:35,280 --> 00:08:38,800 Speaker 2: more than four million dollars in total, but Gabron had 142 00:08:38,840 --> 00:08:45,560 Speaker 2: just replaced one problem with another. The investors he'd brought 143 00:08:45,559 --> 00:08:49,160 Speaker 2: on expected him to grow and attract even more investments, 144 00:08:49,600 --> 00:08:53,520 Speaker 2: so Gabron decided to keep faking the numbers. That created 145 00:08:53,559 --> 00:09:11,120 Speaker 2: a whole new set of math problems. That's after the break. Gebron, 146 00:09:11,120 --> 00:09:14,240 Speaker 2: whose Ipha, may have lied through his teeth about the 147 00:09:14,280 --> 00:09:17,559 Speaker 2: success of his e fishery business, but he still knew 148 00:09:17,600 --> 00:09:21,000 Speaker 2: how to tell a good story, one that hooked investors 149 00:09:21,280 --> 00:09:24,480 Speaker 2: big time. Here he is talking about his ambitions to 150 00:09:24,520 --> 00:09:27,720 Speaker 2: bring the company's tech to fish farmers all around the world. 151 00:09:28,520 --> 00:09:32,560 Speaker 3: We're really excited about the future because we're pioneering this sector. 152 00:09:32,600 --> 00:09:36,640 Speaker 3: We're technically creating this category of fish tech, of aquaculture 153 00:09:36,679 --> 00:09:41,079 Speaker 3: technology that then has a really big upside on building 154 00:09:41,080 --> 00:09:44,240 Speaker 3: the market and building the sector even further. For us, 155 00:09:44,280 --> 00:09:45,240 Speaker 3: its sky is the limit. 156 00:09:45,960 --> 00:09:49,160 Speaker 2: The story appealed to an investment community obsessed with the 157 00:09:49,200 --> 00:09:53,160 Speaker 2: idea of impact investing, a way to generate social or 158 00:09:53,240 --> 00:09:57,200 Speaker 2: environmental benefits while making money, And after the success of 159 00:09:57,240 --> 00:10:02,280 Speaker 2: that first round of funding, the money kept coming. In 160 00:10:02,320 --> 00:10:06,640 Speaker 2: twenty twenty two, after a flurry of interest SoftBank, Temasek 161 00:10:06,920 --> 00:10:11,000 Speaker 2: and Sequoia India pumped more money into the company, valuing 162 00:10:11,040 --> 00:10:14,480 Speaker 2: it at four hundred and ten million dollars. But the 163 00:10:14,480 --> 00:10:17,839 Speaker 2: more funds Gebron raised, the more creative he had to get. 164 00:10:18,000 --> 00:10:21,319 Speaker 2: To cover his tracks. He asked farmers to move their 165 00:10:21,360 --> 00:10:26,320 Speaker 2: existing business onto his platform in exchange for a commission fee. 166 00:10:26,360 --> 00:10:31,360 Speaker 2: He began to operate with two sets of books. David 167 00:10:31,480 --> 00:10:34,600 Speaker 2: You and the Bloomberg team spoke to Gabron extensively on 168 00:10:34,800 --> 00:10:37,560 Speaker 2: how it all went down. Did he tell you about 169 00:10:37,600 --> 00:10:40,160 Speaker 2: what was going through his mind as he was fudging 170 00:10:40,200 --> 00:10:40,880 Speaker 2: these numbers? 171 00:10:41,480 --> 00:10:45,080 Speaker 1: Gebron told us that his moral compass was quite mathematical. 172 00:10:45,760 --> 00:10:48,520 Speaker 1: In his exact words, if the number of impacts that 173 00:10:48,600 --> 00:10:52,000 Speaker 1: I can create at a given time outsizes the potential 174 00:10:52,120 --> 00:10:55,040 Speaker 1: risk and damage that might be created, then it's still 175 00:10:55,080 --> 00:10:57,160 Speaker 1: a net positive and you should still do it as 176 00:10:57,240 --> 00:10:58,360 Speaker 1: long as it's a net positive. 177 00:10:59,240 --> 00:11:03,720 Speaker 2: As evaluatestions got higher, Gabron found new and bigger ways 178 00:11:03,760 --> 00:11:07,000 Speaker 2: to make the numbers add up. That included setting up 179 00:11:07,040 --> 00:11:11,000 Speaker 2: at least five subsidiaries and thousands of fake accounts to 180 00:11:11,040 --> 00:11:13,720 Speaker 2: make artificial purchases for me. 181 00:11:13,880 --> 00:11:16,440 Speaker 1: One of the key red flags was the lack of 182 00:11:16,559 --> 00:11:20,600 Speaker 1: impact that his business was having on the feed industry. 183 00:11:21,360 --> 00:11:23,640 Speaker 1: If you have tens of thousands of farmers who are 184 00:11:23,640 --> 00:11:26,760 Speaker 1: buying fish feed on your platform, that should have a 185 00:11:26,800 --> 00:11:30,120 Speaker 1: seismic impact on the fish feed industry of Indonesia. But 186 00:11:30,400 --> 00:11:33,400 Speaker 1: some of my sources were saying that they were speaking 187 00:11:33,480 --> 00:11:36,280 Speaker 1: to the fish feed providers, and they in turn were 188 00:11:36,480 --> 00:11:38,760 Speaker 1: very confused because there was almost no impact. 189 00:11:39,480 --> 00:11:43,400 Speaker 2: Last year, rumors began to surface on social media pointing 190 00:11:43,440 --> 00:11:47,800 Speaker 2: to inaccuracies in sales numbers, and then in November came 191 00:11:47,840 --> 00:11:50,240 Speaker 2: an allegation of financial misconduct. 192 00:11:50,920 --> 00:11:54,280 Speaker 1: The real straw that broke the camel's back was a 193 00:11:54,280 --> 00:11:58,640 Speaker 1: whistleblower report that basically said the numbers that investors are 194 00:11:58,640 --> 00:12:01,880 Speaker 1: getting did not match up the real numbers inside the company. 195 00:12:03,880 --> 00:12:06,880 Speaker 2: The report, sent to an E Fishery board member, brought 196 00:12:06,920 --> 00:12:10,680 Speaker 2: the whole thing crashing down on Gabron. In December, he 197 00:12:10,760 --> 00:12:14,400 Speaker 2: came clean to his colleagues and investors. He was suspended 198 00:12:14,440 --> 00:12:18,240 Speaker 2: and replaced, but the damage was already done. He had 199 00:12:18,280 --> 00:12:21,360 Speaker 2: inflated revenue by almost six hundred million dollars in the 200 00:12:21,440 --> 00:12:24,680 Speaker 2: nine months through September of last year. More than three 201 00:12:24,760 --> 00:12:29,360 Speaker 2: hundred million dollars of investor money was gone. Gabron denied 202 00:12:29,400 --> 00:12:31,720 Speaker 2: taking any of it. He said he agreed to speak 203 00:12:31,720 --> 00:12:35,160 Speaker 2: to Bloomberg to state publicly he didn't steal money, and 204 00:12:35,280 --> 00:12:38,600 Speaker 2: claims it was all paid out to employees, business partners, 205 00:12:38,600 --> 00:12:45,320 Speaker 2: and creditors. David E Fishery had the backing of some 206 00:12:45,400 --> 00:12:47,240 Speaker 2: of the biggest investors in the world. I mean, we're 207 00:12:47,240 --> 00:12:51,319 Speaker 2: talking about Japan's soft Bank and Singapore's Temasek. The accounting 208 00:12:51,320 --> 00:12:55,040 Speaker 2: firm Grant Thornton audited E Fishery's financial statements in twenty 209 00:12:55,080 --> 00:12:58,920 Speaker 2: twenty two. How is it that Gabron was able to 210 00:12:58,960 --> 00:12:59,920 Speaker 2: get away with this. 211 00:13:00,320 --> 00:13:03,160 Speaker 1: And for so long? So I think something important to 212 00:13:03,160 --> 00:13:07,440 Speaker 1: remember is that Indonesia is an incredibly difficult market to 213 00:13:07,520 --> 00:13:10,840 Speaker 1: operate in because you don't have a single land mass, 214 00:13:10,880 --> 00:13:15,400 Speaker 1: you have seventeen thousand islands spread out. One key problem 215 00:13:15,559 --> 00:13:18,600 Speaker 1: was it's really hard to find these farms without E 216 00:13:18,640 --> 00:13:22,360 Speaker 1: Fishery support, and that in turn gave Gibron the chance 217 00:13:22,440 --> 00:13:26,360 Speaker 1: to quote unquote brief the local area managers about the 218 00:13:26,440 --> 00:13:28,720 Speaker 1: numbers that would have been expected to come out of 219 00:13:28,720 --> 00:13:29,520 Speaker 1: that part of the world. 220 00:13:30,840 --> 00:13:35,200 Speaker 2: SoftBank, Temasek, and Sequoia, India and Southeast Asia declined or 221 00:13:35,200 --> 00:13:39,120 Speaker 2: didn't reply to Bloomberg's requests for comment. A spokesperson for 222 00:13:39,160 --> 00:13:42,599 Speaker 2: Grant Thornton said it's deeply concerned over the allegations and 223 00:13:42,760 --> 00:13:45,319 Speaker 2: is working to understand the full extent of the situation. 224 00:13:46,240 --> 00:13:49,520 Speaker 2: There was another factor that worked in Cabron's favor, a 225 00:13:49,640 --> 00:13:54,079 Speaker 2: surge and investor interest in impact investing with a particular 226 00:13:54,160 --> 00:13:56,080 Speaker 2: focus on his part of the world. 227 00:13:57,400 --> 00:13:59,480 Speaker 1: At the time that E Fishery was getting a lot 228 00:13:59,520 --> 00:14:03,280 Speaker 1: of money from globally investors, Southeast Asia was incredibly hot. 229 00:14:03,720 --> 00:14:06,720 Speaker 1: E Fishery was a real gem. This is a business 230 00:14:06,840 --> 00:14:11,480 Speaker 1: that's doing impact investment work. It's helping farmers, it's using technology, 231 00:14:12,240 --> 00:14:14,360 Speaker 1: and I wouldn't say this is all impact investing. They 232 00:14:14,400 --> 00:14:19,160 Speaker 1: all thought profitable business, higher revenue growth, hockey stick projections, 233 00:14:19,560 --> 00:14:22,200 Speaker 1: emerging market. They all want to put an allocation into 234 00:14:22,240 --> 00:14:22,960 Speaker 1: Southeast Asia. 235 00:14:24,680 --> 00:14:28,480 Speaker 2: The fallout from E Fishery has resurfaced questions about whether 236 00:14:28,520 --> 00:14:32,880 Speaker 2: the traditional venture capital model really works in emerging markets. 237 00:14:33,560 --> 00:14:36,960 Speaker 1: There's a reason why you haven't seen the scale of 238 00:14:37,000 --> 00:14:40,360 Speaker 1: investing in Indonesia that you see in China or the US. 239 00:14:41,120 --> 00:14:44,560 Speaker 1: This really brings to question whether or not the unit 240 00:14:44,600 --> 00:14:47,400 Speaker 1: economics of Indonesia makes sense for a lot of business 241 00:14:47,400 --> 00:14:50,280 Speaker 1: models that have been brought there. The average middle class 242 00:14:50,360 --> 00:14:53,160 Speaker 1: citizen of Indonesia does not spend the same amount of 243 00:14:53,200 --> 00:14:56,320 Speaker 1: money in sheer dollar terms that the average middle class 244 00:14:56,320 --> 00:14:58,600 Speaker 1: citizen of China or Australia do. 245 00:15:00,000 --> 00:15:02,760 Speaker 2: Now, investors are still trying to figure out how to 246 00:15:02,800 --> 00:15:05,960 Speaker 2: wrap up the E Fishery business. Most of the staff 247 00:15:06,000 --> 00:15:09,160 Speaker 2: have been laid off. Many of the fish feeding devices 248 00:15:09,240 --> 00:15:12,680 Speaker 2: were sold to recyclers for about six dollars each, and 249 00:15:12,760 --> 00:15:16,360 Speaker 2: that's according to people familiar with the matter. The illusion 250 00:15:16,440 --> 00:15:19,760 Speaker 2: that Gabron built over thirteen years took less than three 251 00:15:19,840 --> 00:15:20,960 Speaker 2: months to collapse. 252 00:15:21,640 --> 00:15:24,160 Speaker 1: And as for Gabron, at the moment, a lot of 253 00:15:24,160 --> 00:15:26,120 Speaker 1: his life looks much like it did at the start 254 00:15:26,160 --> 00:15:30,720 Speaker 1: of E Fishery. He's selling frozen seafood. He's trying to 255 00:15:30,840 --> 00:15:35,280 Speaker 1: help former colleagues create fish farming collectives so that they 256 00:15:35,280 --> 00:15:38,240 Speaker 1: can continue the business in some way, shape or form, 257 00:15:38,440 --> 00:15:42,000 Speaker 1: and he's trying to work out what his options are. 258 00:15:42,600 --> 00:15:45,240 Speaker 1: There is an investigation underway, so they could well be 259 00:15:45,440 --> 00:15:53,160 Speaker 1: more consequences for him. 260 00:15:53,200 --> 00:15:56,760 Speaker 2: This is the Big Take Asia from Bloomberg News. I'm Wanha. 261 00:15:56,880 --> 00:15:59,640 Speaker 2: This episode was produced by Young Young and Naomi m. 262 00:16:00,400 --> 00:16:03,360 Speaker 2: It was edited by Patty Hirsch and Emily Cadman. There 263 00:16:03,400 --> 00:16:07,040 Speaker 2: was additional reporting by Olivia Poe and Forrest Makdar. It 264 00:16:07,080 --> 00:16:09,440 Speaker 2: was fact checked by Eddie Dwan and mixed and sound 265 00:16:09,440 --> 00:16:13,480 Speaker 2: designed by Taka Yasuzawa. Our senior producer is Naoli Shaven. 266 00:16:13,720 --> 00:16:17,880 Speaker 2: Our senior editor is Elizabeth Ponzo. Our deputy executive producer 267 00:16:18,000 --> 00:16:21,600 Speaker 2: is Julia Weaver. Our executive producer is Nicole Beamster Bower. 268 00:16:21,880 --> 00:16:25,000 Speaker 2: Sage Bowman is Bloomberg's head of podcasts. If you like 269 00:16:25,040 --> 00:16:27,840 Speaker 2: this episode, make sure to subscribe and review The Big 270 00:16:27,880 --> 00:16:29,200 Speaker 2: Take Asia wherever you. 271 00:16:29,200 --> 00:16:30,280 Speaker 1: Listen to podcasts. 272 00:16:30,520 --> 00:16:33,680 Speaker 2: It really helps people find the show. Thanks for listening, 273 00:16:33,840 --> 00:16:34,640 Speaker 2: See you next time.