Singapore-based grocery start-up Honestbee is still churning through the cash as it moves to restructure the business following the four-month debt moratorium it was granted last month.
The retail start-up is burning through an estimated $1.5 million per month and is relying on shareholder support and key investor Brian Koo for working capital.
Koo and his associates have invested almost S$260 million (US$188.6 million) in Honestbee over the years, while he has put in at least $1.6 million in the past couple of months.
He told the Straits Times on Wednesday that he believes the company still has untapped potential as long as it continues to focus on delivering value to its customers.
Koo, who resigned from the firrm’s board in the middle of last month and was its interim CEO between May and July, said he was motivated to invest in Honestbee in its early days as he believed in its potential, “given the rising trend of on-demand apps and changing consumer behaviour”.
He added that the idea of retail businesses that operate across both online and offline platforms attracts millennial consumers, a concept embodied in Honestbee’s Habitat store and one that can be replicated on a larger scale elsewhere.
Honestbee CEO Ong Lay Ann said Koo, whose family controls South Korean tech giant LG, stepped in as interim CEO because there was a gap in management when the previous boss, co-founder Joel Sng, left.
Ong added that other interested parties have been talking to the firm since the debt moratorium was granted, including an Asian retailer.
Honestbee is also setting up a company in the US that will wholly own its business and assets through a new Singapore-based firm.
While Sng still holds 79 per cent of the company’s shares, the firm is proposing a debt-to-equity swap for creditors, excluding those owed S$500 or less, which would see his stake diluted.
Reshmi Khurana, managing director and Southeast Asia head at investigation and risk management firm Kroll Inc, said creditors will be looking at factors such as the long-term viability of the sector and the business, and the brand’s strength, before taking Honestbee shares.
THE STRAITS TIMES