eFishery's Round-Tripping Scandal: How to Magically Triple Your Revenue (Without Actually Making Any Money)
Move over Enron, step aside Wirecard; there’s a fresh new addition to the "Totally-Not-Fraud-But-Kinda-Fraud" Hall of Fame, and this one’s swimming straight out of Southeast Asia’s aquaculture sector. Let’s talk about eFishery, the Indonesian unicorn that recently uncovered the ultimate growth hack: selling things to itself and calling it revenue. Why spend years building a solid business when you can just manufacture financial success out of thin air?
Yes, forget about minor inconveniences like actual sales, real customers, or sustainable profitability. That’s old-school thinking. The new way to scale a startup is far simpler: just move money in a circle, call it revenue, and watch the investor dollars rain down. You don't need product-market fit when you’ve got "creative accounting."
In this hard-hitting exposé (well, more sarcastic rant), let's break down how round-tripping works, how eFishery pulled off its magical 3X revenue inflation trick, and why private companies can get away with what would land a Wall Street CEO in federal court faster than you can say "securities fraud."
Step Right Up! The Magical World of Round-Tripping
For the uninitiated, round-tripping is one of the simplest, most elegant financial illusions ever devised. It’s what happens when a company sells something to a related entity, only to buy it back later, thus creating the illusion of booming sales while, in reality, just moving the same money around like a particularly uninspired game of hot potato.
Think of it as the corporate equivalent of standing in front of a mirror and high-fiving yourself, except, in this case, investors, regulators, and the media all stand around clapping, pretending they just witnessed actual business success.
And it gets better. Unlike traditional fraud, which often involves pesky legal consequences, round-tripping has the advantage of being not technically illegal in many cases. It’s just highly misleading, profoundly unethical, and the financial equivalent of stuffing your pants with socks to impress investors.
How the Magic Trick Works:
1. Company A "sells" a product or service to Company B.
- Company B, of course, is usually an undisclosed shell company, an “affiliate,” or a business entity run by someone’s cousin.
2. Company B records the purchase as a legitimate transaction.
- “Wow, look at all this demand!” say the accountants, conveniently ignoring the fact that Company B exists purely to participate in this charade.
3. Company A then "buys" the product/service back, often at a slight markup or discount.
- This way, both companies get to record revenue, even though, in reality, nothing has changed except the balance sheet looking artificially beefy.
4. Both companies pat themselves on the back and report "record-breaking" growth.
- Investors swoon. Valuations skyrocket. Business journalists write breathless profiles. All while no actual value has been created.
Now, take this simple trick, repeat it across thousands of transactions, and BOOM! You’re now the CEO of a billion-dollar company! Or, at least, a company that looks like it’s worth a billion dollars until someone actually audits the books. It’s financial alchemy, except instead of turning lead into gold, you’re turning BS into revenue.
And if you’re a private company, you might even get away with it.
eFishery’s Recipe for Instant Growth: Just Add Round-Tripping!
Now, let’s talk about eFishery, the world’s most ambitious fish-feeding fintech fraud factory (say that five times fast).
This Indonesian startup, once the darling of Southeast Asia’s venture capital scene, allegedly overstated its revenue by a casual $600 million in 2024. That means a staggering 75% of its reported revenue wasn’t real. But hey, who’s counting? Certainly not the investors who threw money at them.
How eFishery Pulled Off Its Financial Magic Trick
Step 1: Sell Fish Feed and Equipment… to Yourself.
Who needs actual customers when you can just invent some? eFishery allegedly funneled transactions through shell companies and undisclosed related parties. Instead of expanding its customer base, eFishery simply became its own best client.
Step 2: Book Fake Sales and Call It “Explosive Growth.”
With their network of friendly (read: imaginary) customers, eFishery could now move money around in a circle and call it “revenue.” Investors, who apparently never questioned why an automated fish feeder startup was growing faster than actual tech giants, lapped it up like hungry koi.
Step 3: Keep Investors Hooked.
Private investors, already intoxicated by Southeast Asia’s startup boom, saw eFishery’s glowing revenue reports and thought they were investing in the next Amazon of Aquaculture. They weren’t. But when the numbers look that good, who has time for due diligence?
Step 4: Collect Billions in Funding Before the Truth Comes Out.
With every fresh funding round, eFishery’s valuation soared higher. That is, of course, until someone actually checked the books; a tragic, but inevitable moment in every great startup scandal.
And just like that, Indonesia’s first aquatech unicorn turned into the financial equivalent of a house of cards.
Why Do Companies Round-Trip? (It’s Not Because They Love Circles)
You might be wondering: Why would any company risk its reputation, its investors' trust, and the possibility of legal repercussions just to artificially inflate its numbers? Surely, there must be a good reason; or at least a financially desperate one.
It’s always the second one.
The Startup Growth Obsession™
In venture capital, companies aren’t valued on boring old things like profitability or stable revenue. No, that’s for suckers running “real businesses.” Instead, startups live and die by one metric and one metric only: growth.
If your numbers aren’t skyrocketing, investors lose interest. That means companies are under constant pressure to show exponential growth, even if that growth is entirely fictional.
“Fake It Till You Make It” (Or Until the Auditors Show Up)
In tech and startup culture, there’s a fine line between visionary optimism and good old-fashioned financial deception. Investors love a founder who’s willing to push boundaries, right up until they get caught.
WeWork did it. Theranos did it. eFishery just put an aquatech spin on it.
The logic is simple: If we just survive long enough, we’ll eventually grow into our valuation! Until then? Creative accounting.
Everybody’s Doing It (So Why Can’t We?)
When you’re a startup founder, and you see other companies pulling off “aggressive” financial strategies without consequences, the temptation is irresistible. If everyone else is exaggerating their numbers, you’re at a competitive disadvantage if you don’t.
And so, the cycle repeats itself:
Investors expect hypergrowth
Startups manufacture that growth (by any means necessary)
Valuations inflate
At some point, reality crashes the party
Unfortunately for eFishery, that last part just happened.
A Fraudulent Hall of Fame: When Round-Tripping Goes (Very Publicly) Wrong
For those thinking, "Surely this is a one-off scandal?" it's not. Corporate fraud, like fashion trends, is cyclical. Round-tripping has been the main event in some of the biggest financial debacles of all time. Let’s take a nostalgic stroll down corporate fraud memory lane, where the numbers are fake, but the consequences are very, very real.
Enron (2001): The OG Round-Tripping Scandal
Enron is the gold standard of corporate deception. It's the fraud that walked so that future scams could run. These guys industrialized round-tripping, turning it into a full-scale financial illusion with more shell companies than a hermit crab convention.
Their trick? Selling assets to themselves using off-the-books partnerships, then recording those sales as revenue, essentially paying themselves for products they never actually sold. It worked like a charm until someone actually checked the numbers. The result? A $74 billion collapse, thousands of employees out of jobs, and a handful of executives trading in their Armani suits for prison jumpsuits.
Wirecard (2020): The German Fintech That Never Had the Money It Claimed
Wirecard was Germany’s crown jewel of fintech until it turned out the jewel was made of plastic. For years, this “revolutionary” payments company faked $2 billion in profits using round-tripping.
Their secret sauce? Creating phantom transactions through shell companies, making it look like billions were flowing through their systems when, in reality, they were just moving the same money around. When auditors finally showed up asking, “Hey, where’s the cash?”, the ruse was up.
The Dot-Com Bubble (1999-2001): Ad Revenue Gone Wild
Before the crypto bros and AI startups of today, we had dot-com boomers, who believed that clicks and eyeballs mattered more than actual profits. Enter round-tripping, where tech companies bought ads from each other, creating the illusion of massive traffic, soaring revenues, and limitless growth potential.
The catch? No one outside the tech bubble was actually buying their services. When reality finally caught up, the bubble burst, balance sheets collapsed overnight, and investors were left holding stock in companies that only existed on PowerPoint slides.
Moral of the Story?
Round-tripping always looks brilliant, right up until someone actually audits the books. And when that happens, poof... companies, fortunes, and reputations go up in smoke.
Unlike Enron or Wirecard, eFishery enjoys the warm, regulation-free embrace of private markets, meaning the SEC isn’t exactly kicking down their door. That’s the beauty of being a privately held company: you can engage in financial shenanigans for years without pesky regulators ruining the party.
That being said, investors who funneled millions into this financial illusion might start getting their legal teams involved. Nothing says "growth-stage startup" like a flurry of lawsuits. Some might argue this is straight-up fraud, but in venture capital circles, it’s often just rebranded as “aggressive growth accounting;” a term designed to sound bold and innovative rather than, you know, potentially criminal.
The real lesson here? If a startup’s numbers look too good to be true, they probably are. Financial fraud isn’t new and the playbook hasn’t changed in decades. The only things that change are the industries, the logos, and the PR spin.