With 2019 coming to an end, Singapore-headquartered, on-demand grocery startup Honestbee may finally have something to smile about—potential fresh funding from JG Summit, the Philippines-based $11 billion business empire.
Honestbee had not only spent the past four years blowing through over $60 million in raised capital, but also racked up north of $200 million in debt on its way to insolvency. Singapore courts have given the company until 31 January to devise a recovery plan to appease creditors.
Backed by a member of South Korea’s LG Group, Honestbee was once present in eight countries across Asia, where it enabled customers to order groceries to their door, often with same-day deliveries. Now, it’s a shell of its former self. It reportedly has only around 240 employees, down from 1,000 in late 2018. Its service seems active only in Singapore, where it also operates a costly superstore called Habitat, inspired by Alibaba’s hybrid online-offline stores in China.
JG Summit—owned by the Gokongwei family, the third richest in the Philippines—has interests in food, power, real estate, banking, telecom, and airlines. Two people with knowledge of the matter said the conglomerate’s digital ventures arm, JG DEV, is in talks to invest in Honestbee. The negotiations could see JG DEV take a majority stake in Honestbee’s regional business, or settle for a controlling ownership of Honestbee’s Philippines business.
The more audacious strategy would see JG DEV buy into Honestbee across Southeast Asia, with a view to finding opportunities for the JG group outside the Philippines.
It seems increasingly likely, however, that an investment in the Philippines business will prevail. The country was Honestbee’s largest market based on gross merchandise volume (GMV) as of 2018, according to documents seen by The Ken. And JG’s retail affiliate, Robinsons Retail Holdings, was one of the startup’s major partners.
This could set the tone for Honestbee to broker similar deals in other countries it has operated in. The Ken understands that Honestbee is also in talks with investors in South Korea and Thailand. While it had previously held similar discussions with ride-hailing firms Grab and Gojek, it had not reached an agreement with either, two former executives aware of the discussions said.
If realised, the deal with JG DEV will provide a lifeline to the company, which has been rocked by scandals reminiscent of the recent WeWork fiasco. Honestbee CEO Joel Sng, who’s known for having invested in big tech companies like Facebook and Uber, and his two fellow co-founders have all left the company.