Honestbee

What did it do?

Honestbee was an online grocery and delivery service that relied on personal shoppers who picked up products from supermarkets and speciality shops on customers' behalf and delivered them. Over time the company added services such as food delivery, laundry collection and cinema tickets, and opened a technology-driven physical supermarket in Singapore called habitat.

Why did it shut down?

The company quickly spread across eight markets in Asia and a range of very different services, but could not find the cash to sustain that structure. In early 2019 it began looking for a buyer; in April and May 2019 it suspended its overseas operations and halted its food and laundry services. All the founders left the company during 2019, and it tried to restructure under debt moratorium protection. The COVID-19 pandemic forced the habitat store to close; in March 2020, 80 per cent of staff were laid off and salaries were delayed. Following a creditor's application, a winding-up order was made against the company in July 2020.

The story

When habitat opened in Singapore in October 2018, it was presented as the company's "crown jewel": a technology-driven supermarket and dining space blending online and physical shopping. Two years later the same premises were being used as a delivery hub by rival RedMart.

Honestbee was launched in Singapore on 23 July 2015 by Joel Sng, Isaac Tay and Jonathan Low. The model was simple: the customer ordered through the app, and a personal shopper picked up the products from stores such as FairPrice, Tesco or Jones the Grocer and brought them to the door. Backed by venture capital from Asia and the US, the company rapidly expanded into Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, the Philippines and Japan. Laundry collection was added to grocery delivery in 2016, followed by food delivery and cinema ticket sales in 2017. By 2019 the company had 860 employees.

In early 2019 talk began that the company's finances were critical; it was alleged to have held acquisition talks with companies such as Grab and Gojek. In April and May 2019 operations in Thailand, the Philippines, Hong Kong, Japan and Indonesia were suspended, food delivery was halted and the laundry service was put on hold. CEO Joel Sng left in May 2019; he was succeeded first by investor Brian Koo and then by Ong Lay Ann. In July 2019 the last remaining founder, Jonathan Low, also left. The company obtained a debt moratorium and tried to restructure.

In January 2020 FLK Holdings, led by Koo, invested under a new rescue plan, but the COVID-19 pandemic led to habitat's closure. In March 2020, 80 per cent of staff were laid off and salaries and pension contributions were delayed. In April 2020 a creditor applied to wind up the company, and a winding-up order was made in July 2020. In March 2020 Honestbee had sued former CEO Sng, alleging breaches of fiduciary duty including using company funds to buy private property. In 2023 the liquidator reported having recovered just 720 Singapore dollars from the company.

Honestbee shows how rapid geographic expansion and adding a new service every year can pull a delivery company apart. Every new market and service meant a separate operations team and fixed costs; built before the core business turned a profit, that structure had to be dismantled piece by piece once the flow of capital stopped.

Lessons for founders

• Do not expand into new countries and new service verticals before unit economics work in a single city; every new line adds fixed costs.
• A glossy physical store does not fix the problems of a digital business; launch projects with large fixed costs while cash flow is positive.
• Set up reporting that lets the board regularly scrutinise how investment money is spent.

Sources

1. Honestbee (Wikipedia)
2. Grocery delivery startup Honestbee is running out of money and trying to sell (TechCrunch, 2019-04-26)
3. Honestbee retrenches 80% of staff, delays payment of salaries and CPF contributions (The Straits Times, 2020-03-10)
4. Honestbee says suspending some overseas operations, cutting global headcount all part of ongoing review (The Straits Times, 2019-04-30)

This section is compiled from public sources (Wikidata, news archives and company announcements). Figures are given as they appear in those sources; unknown fields are left blank. If you spot a mistake in an entry, you can send us a correction.

Is something in this entry wrong? Request a correction → Method