Aaqua swamped with layoffs, a lawsuit, and product launch delays

This week, On the Rise investigates the troubles at a Singapore-based social media firm and dives into the funding boom in Indonesia’s agritech space. [Read from your browser]( On the Rise 🚀 Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If you’re not a subscriber, get access by [registering here](. Written by Collin Furtado Journalist Hello {NAME} I recently came across a social media post arguing that, as the funding winter intensifies, we would likely see more stories about deep-rooted troubles in many startups. I couldn’t agree more with this, as each day brings with it another story of a startup riddled with red flags. Tech in Asia stories such as the [crisis at PayMongo]( the shake-up at [Sequoia-backed AI firm Rudder]( and [Euda Health’s dubious US$583 million SPAC valuation]( are some recent examples from Southeast Asia. Today’s Big Story by my colleagues Tian Wen and Terence investigates another startup. Singapore-based social media firm Aaqua has laid off most of its over 180 staff members. The company’s founder, Robert Bonnier, is in a legal battle with a key investor over fraud allegations, with the latter claiming that Bonnier lied that Apple and LVMH were Aaqua’s founding partners. But what’s also concerning is that the company hasn’t publicly launched a single product even after having spent millions in the two years since it began. However, a company spokesperson cites the lawsuit as the reason for the delay in the launch of its version 2.0 product. The story is still developing, with more updates expected. Aside from Aaqua’s troubles, I couldn’t help but think about the startup’s name, which seems apt for a mineral water brand or an agritech firm. Which brings me to the Making Waves article I pieced together on the rise in funding in Indonesia’s agritech startups. Not only has the number of funding deals grown, but the size of the rounds have increased as well. Join me as I explore what’s driving investors to pump more funds into the sector. -- Collin  --------------------------------------------------------------- THE BIG STORY [Startup allegedly lied about Apple, LVMH investment; axed most of its staff]( The CEO of Singapore-based Aaqua also came under fire for berating an employee in a virtual forum.  ---------------------------------------------------------------  MAKING WAVES Investors eye Indonesia’s agritech harvest Here’s what happened: - Funding in Indonesia’s agritech startups has grown by over 60% this year. - More agritech startups are raising larger rounds of funding than last year. - Last week, Gokomodo, a small agritech firm, raised US$26 million in series A money in its very first round of funding. Here’s our take: Indonesia’s agritech sector seems to be flourishing, with funding growing significantly this year. The country’s agritech startups have seen an over 60% rise in funding amount in 2022 to reach US$216.9 million from US$134.5 million in 2021, according to disclosed funding data available on Tech in Asia’s database. However, this jump is actually closer to a 3x growth, as nearly half of the funding amount in 2021 came from just one deal: TaniHub’s [US$65.5 million]( series B round. The number of deals in 2022 has also risen by 62% - from eight last year to 13 this year. The size of these rounds have increased too, with five startups raising eight-figure US dollar amounts, up from three firms last year that did the same. Some of the biggest deals in 2022 include eFishery’s [US$90 million]( round, AgriAku’s [US$35 million]( raise, and Aruna’s [US$30 million round](. Last week, Gokomodo, an Indonesia-based agriculture supply chain platform, raised [US$26 million]( in its very first round of funding. Indonesia’s agritech sector is also attracting the likes of big investors such as East Ventures, Temasek, Sequoia Capital, and SoftBank, among others. East Ventures has backed six Indonesian agritech startups so far, three of which it invested in the last three months. “We see there’s a big potential for agribusiness in Indonesia,” Devina Halim, principal at East Ventures, tells Tech in Asia. She says that the firm has a “very robust” interest in investing in the agritech space. Agriculture is one of the largest contributors to the country’s gross domestic product (GDP) - making up around [14% of its GDP]( in 2020. Last year, the GDP of agriculture, forestry, and fishery in Indonesia accounted for [US$158 billion](. The country’s agriculture sector also contributes the most to Southeast Asia’s GDP, making up about [11% of the region’s total gross domestic product](. Indonesia’s agritech market grew at about a 40% compound annual growth rate on the basis of revenue generated from FY2016 to FY2021, according to a [Ken Research report](. The main reason for this growth is the role tech startups are playing in reducing the inefficiencies in the supply chain, a recent [RedSeer Consulting report]( noted. Some of the challenges farmers in the industry face include limited or no access to funds and technology. Modern supply chain networks and data analytics can help address some of these issues, says RedSeer analyst Roshan Raj Behera in the report. Farming-as-a-service (FaaS) platforms, which offer technological solutions to farmers, receives a majority of investor funds in the industry, followed closely by ecommerce or marketplace agritech firms. However, agri-financing startups lag behind in funding, as the country’s Financial Services Authority (OJK) has implemented license requirements that have limited the number of players in the industry. An example of a successful Indonesian FaaS startup is eFishery, which has seen its revenue grow to over US$100 million in 2021 and is profitable. Fandy Cendrajaya, partner at Kenangan Kapital, tells Tech in Asia that the VC firm, which has invested in Indonesian agritech startup Eratani, expects more funding deals in the agritech space till the end of this year. “There should be at least one unicorn from the sector,” he says. And as Tech in Asia [pointed out previously]( this could very well be eFishery. But while [Indonesia’s agritech sector has so far been pandemic-proof]( it might not necessarily be immune to the recession. In February, TaniHub closed two of its warehouses and laid off some of its employees. It also shifted away from its consumer business, choosing instead to focus on a B2B model. One industry source tells Tech in Asia that B2C agritech has been compelling amid the pandemic, but this isn't the case now. Currently, the addressable market has shrunk, as people are free to buy their produce locally. B2B could perhaps be the better model, the source says. “You can cater to enterprises and SMEs. They have a more predictable and concentrated demand because you're not going to hundreds of businesses - perhaps a subset of that. Then the economics starts looking better,” he says. Cendrajaya, meanwhile, shares that for now there is still fragmentation in the country’s agritech sector and that services from an agritech startup can actually be complementary to other firms in the segment. But he foresees consolidation will happen in the space later on. -- Collin  --------------------------------------------------------------- FYI [Tracking layoffs across Asia’s startup ecosystem (Updated)]( Several startups are dismissing staff to stay afloat as headwinds hit Asia. This layoff tracker is keeping tabs on marching orders.  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the emerging tech scene [here](. 1️⃣ Uena, an Indonesia-based cloud kitchen startup, raised an [undisclosed amount of seed funding]( in a round led by East Ventures, with participation from IDN Media. The firm plans to use the fresh funding to build more kitchens in the Jakarta area. 2️⃣ Temasek-backed digital transformation firm Temus has [acquired system integration startup Dreamcloud](. Temus provides consulting services to help organizations with their digital transformation strategies. 3️⃣ Edupia, a Vietnam-based edtech startup, raised [US$14 million in series A]( financing led by Jungle Ventures. Alibaba-backed eWTP Capital and Vietnamese firm ThinkZone Ventures also joined the round. 4️⃣ Singapore-based 99 Group is exploring an option to [buy Vietnamese proptech startup Propzy](. However, the deal is currently in “very early stages” and carries “a lot of uncertainties,” an insider source told Tech in Asia. 5️⃣ Indonesian startup, Genexyz, which creates virtual humans, [raised pre-seed funding]( from Future Creative Network, Infia Group, and Ekonomi Baru Investasi Teknologi. Genexyz helps companies develop virtual influencers to better reach their end-customers.  --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you next week! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? 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