As part of an in-depth strategic review of the business, grocery and food delivery startup Honestbee announced on Tuesday that it is halting its food delivery service in Singapore, and is temporarily suspending the laundry service with effect from May 20, 2019.
The decision was made to optimise the business structure, and to drive better focus and alignment with Honestbee’s current strategic priorities, said the startup. Honestbee will continue to operate the grocery delivery service, and its physical store – Habitat by Honestbee.
“Approximately 400 delivery bees are affected by the decision. Although many delivery bees are part-timers, they have played a key role, and have been a critical part of the Honestbee family. During this transition, Honestbee remains committed to assist all delivery bees. The headcount in Singapore remains unaffected,” said the statement.
It added the newly-appointed executive team led by LG scion Brian Koo is working on “future plans to stay relevant and sustainable in today’s rapidly-changing business environment”.
“This will help to put Honestbee in the best possible position to support the business in Singapore and other geographies going forward,” it added.
The food and grocery deliver startup has been undergoing a major strategic review internally, forcing it to also suspend its operations in Hong Kong, Indonesia, Japan and the Philippines. Last week, it announced that it will lay off about 10 per cent of its global workforce.
In the same week, Honestbee also confirmed the departure of its co-founder and CEO Joel Sng, who is now replaced by Koo – the general partner and founder of Silicon Valley-based VC firm Formation 8. A report by TechCrunch said Sng was fired.
The cash-strapped startup is reported to be near the end of its operational runway due to poor financial decisions and investments. A TechCrunch report said that the Singapore-based startup has been actively seeking buyers for its business.
One person close to the development told DEALSTREETASIA that Grab was approached by the startup but declined to engage in further discussions. The ride-hailing giant already has a stake in Honestbee’s competitor HappyFresh.
One former Honestbee executive told us that Honestbee had initially targeted to close a fresh round of funding in January from Japanese investors. The deal, however, failed to conclude because investors were not convinced by Honestbee’s growth prospects and financial decisions.