Honestbee has been making headlines recently for its global layoff and continuous “temporary pause” in operations and partnerships.
On Monday (April 22), it was reported that honestbee has paused its operations in the Philippines due to “funding issues with the [Singapore] headquarters”.
This came as very surprising news, considering that honestbee was touted to be their best-performing market — it accounted for 40 per cent of honestbee’s overall GMV.
The very next day, honestbee announced that is also “temporarily suspending [their] food verticals in Hong Kong and Thailand“.
It did not provide any explanation for this move, except that it was a decision they came to following a “strategic review”.
Honestbee added that its “status … in the remaining markets remain unchanged”, namely Singapore, Taiwan, Indonesia, Malaysia and Japan.
Beyond this spate of news, it was also revealed that honestbee has closed its R&D centres in Vietnam and India.
Are They Really Facing Cashflow Problems?
In Singapore, honestbee has “temporarily paused” its partnership with two supermarkets — FairPrice and U Stars.
An anonymous source told Vulcan Post that this partnership was terminated due to outstanding debts, and it’s plausible to think that the latter is also suffering from late or even unfulfilled payments.
Dongshen News had previously reported that its business in Taiwan owes partner-vendors a total of 240,000 yuan (~S$24,249).
However, when the news surfaced, honestbee maintained that they were not facing any cashflow problems.
Despite claims that they are not in the red, TechCrunch reported today that honestbee is in talks with ride-hailing firms Grab and Go-Jek, among other companies in Asia, to acquire its company.
It is allegedly trying to sell its company due to a “cash crunch”, but why Grab and Go-Jek?
Grab for one, has a huge war-chest. It recently raised US$1.46 billion from SoftBank, bringing its total funding to US$4.5 billion.
Its arch rival Go-Jek, also raised around US$1 billion in February earlier, in a round led by Google, JD.com Inc and Tencent Holdings.
Moreover, both ride-hailing players are known to be a ‘super app’. Adding honestbee’s online grocery delivery service to their existing range of services can help further this ambition.
Honestbee has also reportedly told its Singapore staff that their salaries will be delayed — this has already happened twice this year so far.
Multiple senior executives from various markets have already resigned from the company, including co-founder Isaac Tay.
While their reasons for departure are unclear, the fact that so many key executives are leaving around the same time is a good enough reason to raise eyebrows.
Honestbee Lost Nearly US$6.5 Million In 2018
The interesting thing about honestbee is that it does not have a Chief Financial Officer (CFO).
Instead, all financial decisions are made by honestbee CEO Joel Sng himself, and his associate Roger Koh.
It’s not clear what Koh’s role in the company is, but his LinkedIn profile states that he is a principal with Korean technology investment firm Formation 8, where Sng is also a co-founder.
In terms of the company’s financing, it’s pretty hazy.
At its launch in 2015, honestbee raised US$15 million in a Series A round from Formation8 and there has been no further updates since.
Last year, it raised another US$46 million from more Korean investors.
It is uncertain if the firm raised any other money beyond these two fundings.
Honestbee’s internal data revealed that the firm lost nearly US$6.5 million in December 2018. Its GMV reached nearly US$12.5 million, but the bulk of it was spent on online marketing and customer acquisition.
Three of its markets — Singapore, the Philippines and Taiwan — made up for over 80 percent of its GMV and net income.
As such, it is unclear why honestbee chose to continue and operate in its other markets instead of focusing on these three markets.
“Pausing” its food services in Hong Kong and Thailand won’t do the firm any good either because it is unlikely to have a huge impact on its bottomline.
Habitat in Singapore, for one, is something that the firm should consider pausing, or shutting down instead.
The 60,000 square-feet Habitat adopts an innovative NewGen Retail concept which elevated the business into an omnichannel platform, serving both online and offline consumers.
It was also recently voted as one of the top 16 stores you must visit in 2019 worldwide.
However, continuing to operate Habitat will only increase the firm’s burn rate. In fact, sources within the firm told TechCrunch that the firm has already resorted to switching suppliers for some items as invoices went unpaid.
Vulcan Post has already reached out to honestbee for comments regarding its recent developments.
They have acknowledged the questions surrounding its financial outlook and strategic business plans, but have yet to respond.
Featured Image Credit: honestbee
