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June 25, 2019
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Food

Leak reveals Uber’s $9.99 unlimited delivery Eats Pass

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What’s the cord-cutting equivalent to ditching your kitchen? Uber’s upcoming subscription to unlimited free food delivery. Uber is preparing to launch the $9.99 per month Uber Eats Pass, according to code hidden in Uber’s Android app.

The subscription would waive Uber’s service fee that’s typically 15 percent of your order cost. Given that’s often $5 or more, users stand to save a lot if they order in frequently. But Uber could still earn money on menu item markups, cover costs with a flat order fee that protects against someone ordering a single taco, and most importantly, build loyalty and scale at a time of intense food delivery competition.

The Uber Eats Pass was first spotted by Jane Manchun Wong, the notorious reverse engineering specialist who’s become a frequent TechCrunch tipster. She managed to generate screenshots from Uber’s Android app code the reveals a prototype of the feature. “Get free delivery, any restaurant, any time” is says, showing the amount of money you could have or already saved.

A Uber spokesperson did not dispute the legitimacy of the findings and told TechCrunch “We’re always thinking about new ways to enhance the Eats experience.” They declined to provide further details, which could hint that a launch is imminent but some details are still subject to change. For now we don’t know exactly what perks come with an Eats Pass or where it will be launching first.

At $9.99 per month, the Uber Eats Pass would cost the same and work similarly to Postmates Unlimited and DoorDash DashPass. If they all seem like good deals, you see why they’re less about immediate revenue and more about customer lock-in. You’re a lot less likely to order GrubHub or Caviar if you’ve already pre-paid to cover your Uber Eats delivery costs. And whichever apps emerge from this battle will have instituted the scale and steady behavior to raise prices or just enjoy large lifetime value from each subscriber.

Exploring new business opportunities could help perk up Uber’s share price which closed at $41.50 today two weeks after IPOing at an opening price of $42. There are fears that intense competition across both ride sharing and food delivery could make for an expensive road ahead for the newly public company. Any way it can gain an edge on its rivals keep users from straying to them is important. The logistics giant is already experimenting with allowing restaurants to offer discounts in exchange for promoted placement in the app, which is the first step to Uber becoming an ads company where businesses pay for extra exposure.

If Uber combined Eats Pass with its car service subscription Ride Passes, you have the foundation for a sort of Uber Prime experience — one where you pay an upfront subscription fee that scores you perks and discounts but also makes you likely to spend a lot more on Uber. That bundle could be even more central to Uber than Amazon, which has few direct rivals in the west. People will need to eat and get around for the foreseeable future. Subsidizing loyalty now could be costly in the short-term, but poise Uber for years of lucrative business down the line.

Food delivery startup Dahmakan eats up $5M for expansion in Southeast Asia

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It’s harvest season for Southeast Asia’s full-stack food delivery startups. Following on from Singapore’s Grain raising $10 million, so Malaysia-based Dahmakan today announced a $5 million financing round of its own.

The money takes the startup to $10 million raised to date — its last round as $2.6 million last year — and it comes via new investors U.S-based Partech Partners and China’s UpHonest Capital and existing backers Y-Combinator, Atami Capital and the former CEO of Nestlé who was an angel investor. The round was closed earlier this year but is now being announced alongside this expansion play.

It’s been a busy couple of years for the company, which was founded in 2015 by former execs from Rocket Internet’s FoodPanda service. Dahmakan — which means “Have you eaten?” in Malay — graduated Y Combinator in 2017 and it expanded to Thailand last year through an acquisition, so what’s on the menu for 2019?

It is going all in on ‘cloud kitchen’ model of using unwanted retail space to cook up meals specifically for digital orders, which is entirely its business since it handles all processes in house rather than through a marketplace model.

Already, in its home town of Kuala Lumpur, Malaysia, Dahmakan has introduced ‘satellite’ hubs that will allow it to serve customers located in different parts of the city more efficiently. The service already fares better than rivals like FoodPanda, Grab Food and (in Thailand) GoJek’s GetFood service because customers order ahead of time from a fixed menu with scheduled delivery times, but there’s room to do better and more.

“The way that we are thinking about it is that we are 18 months ahead of the competition in terms of the cloud kitchen model. Most are only starting to build out clusters of mini kitchens (150sqft) or so without leveraging too much AI in terms of product development, procurement or automation in machinery,” Dahmakan COO and co-founder Jessica Li told TechCrunch.

“What we’ve figured out is how to scale food production for thousands of deliveries while maintaining quality and keeping costs at 30 percent below comparable restaurant prices,” she added, explaining that the company plans to add “new brands and new products” using the satellite hub approach.

A serving of Ayam Penyet, Indonesian smashed chicken

Dahmakan is looking to extend its reach in Southeast Asia, too.

Li said the immediate priority is domestic growth in Malaysia with the service set to expand in Penang and Johor Bharu during the third quarter of this year. Beyond that, she revealed that Dahmakan plans to move into Singapore and Indonesia before the end of 2019.

Food delivery is quickly becoming the new ride-hailing war in Southeast Asia as Grab and Go-Jek, which have raised the most money in the region, pour capital into space. Quite why they are doing so isn’t entirely clear. Food could be a channel for loyalty (if such a thing can exist in incentive-led verticals) and user engagement for ride-hailing or other parts of their so-called “super app” services, but, either way, it is certainly distorting the market by flooding users with promotions.

That’s not necessarily a bad thing for startups like Dahmakan and Grain which have grown in a more sustainable and responsible manner. They benefit from more people using food delivery in general, while they may also become attractive acquisition targets in the future.

Like Grain, Dahmakan puts a focus on healthy eating, which stands in contrast to the typical junk food orders that others in the space serve through their marketplace of restaurants. That certainly helps them stand out among certain audiences, and it’ll be interesting to see what new products and brands that Dahmakan is hatching to capitalize on the flood of attention food delivery is seeing..

This is certainly only the start. A Google-Temasek report on Southeast Asia published last year forecasts that the region’s food delivery market will grow from an estimated $2 million last year to $8 billion in 2025. That four-fold prediction is larger than the growth forecast for ride-hailing, although the latter is larger.

“That’s faster than any other region even China,” Li said.

A report from Google and Temasek predicts huge growth for ride-hailing and food delivery services in Southeast Asia

Is a $600 smart oven ever worth it?

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Part of closely following tech is the often mistaken belief that newer, better technologies can help right some of the wrongs older ones caused in the first place. Behold the Wii and the Fitbit — two perfect examples of technologies designed to right some of technologies’ previous wrongs.

It’s tricky because, in some cases, these things do work. We’ve all read the success stories, and for many of us, that’s enough to keep us trying out new things. Some much ultimately relies on our own individual hang ups. If we’re lucky, the right piece of technology at the right time can be legitimately transformative of those things we’d like to change about ourselves.

With something like the June, the hope is two-fold. There’s all of the built-in features and the promise of better baking, coupled with the simple motivating factor of spending $599 on a glorified toaster oven. I’ll admit that test driving it only addresses only the first of those two key things, but my hopes were still pretty high that it could help wean me off of my takeout food dependency.

Thing is, I travel a lot for work. Couple that with a long time living in one of the world’s best and most diverse food cities, and that’s a recipe for picking up food nearly every night. I’m sure I don’t need to tell you what that means for my wallet and waste line, not to mention the packing waste that tends to generate. Bad news all the way around.

Often life gets in the way, as it has with my own testing. This one’s been a little cursed. After a prolonged delay on review units (the second gen oven was announced 10 months ago), I was finally able to get started late last month. Well, after the company sent me a second unit when I discovered the hard way that the first had been damaged in shipping, sending up sparks during my first attempt to cook. I mention that only to say double-check the filaments when you take it out of the box. Perhaps some kind of automotive-like oven health check is in the cards for some future update.

One other thing worth mentioning here, at the risk of offering up TMI, is the fact that I rarely left my bed the week before last, over a particularly bad bout with the stomach flu. The nausea and everything else have been bad enough to put me off of the idea of handling raw meat for the intervening week — something that could hopefully be a boon for my longtime flirtations with vegetarianism.

As someone who’s never been especially enamored with cooking, the June did help fire up those synapsis in my brain a bit. There’s something in being able to cook something decent with minimal effort, and the June does a good job on that front. Locate a recipe with only a handful of ingredients and a stated five to 10 minute prep time, and that’s a solid baby step. Of course, you can only go outside of June’s suggested recipes, but coloring inside the lines is a probably the best place for a beginner to start.

Simplicity, coupled with data collection are where the June really shines. Between the constant heat monitoring, the camera and the inclusion of a meat thermometer, the oven is pulling a lot of data to assure you get the right cook. It’s not idiot-proof (sadly for this culinary dummy), and the first time I tried (the working oven), I’d stuck the thermometer too far in, touching the bottom pan and shortening the cooking time to a too brief five minutes (down from 22).

Make this so idiots like me can use it is probably my main feedback here. Also, though I fully understand why it’s as large as it is, it was still bigger than expected. Which may not mean much to you, if you don’t grapple with the size restrictions of a New York City apartment.

Another minor thing, which probably couldn’t be avoided is that plasticky smell that happens with the first several sessions. Based on the June FAQ, I expected it to go away a lot sooner, but was assured it was just a normal part of the baking process.

For what it’s worth, the simple dishes came out well, which only means a lot if you know how terrible I am at cooking. It’s a weird mental block, I realize. And I did enjoy the process enough to begin experimenting with things outside of the parameters of the June recipes.

Smartphone notifications are a nice feature, though I’m not sure any of the smart features are “necessary” per se. Like, take this time-lapse footage of me slightly overcooking chicken breasts:

[Above: bon appétit?]

Ditto for the image recognition. It does an impressive job mostly identifying the foodstuffs on the tray, but I can’t really foresee a scenario in which you, the chef, is not aware of what you’re cooking before you hit start.

It’s a tricky line to walk. You want to add enough features to justify the purchase of a smart oven, while not loading it up with so many that the price becomes unmanageable. June’s definitely taken a step in the right direction with the second gen oven, but for a majority of users, the balance still isn’t quite there.

India’s most popular services are becoming super apps

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Truecaller, an app that helps users screen strangers and robocallers, will soon allow users in India, its largest market, to borrow up to a few hundred dollars in the nation.

The crediting option will be the fourth feature the nine-year-old app adds to its service in the last two years. So far it has added to the service the ability to text, record phone calls and mobile payment features, some of which are only available to users in India. Of the 140 million daily active users of Truecaller, 100 million live in India.

The story of the ever-growing ambition of Truecaller illustrates an interesting phase in India’s internet market that is seeing a number of companies mold their single-functioning app into multi-functioning so-called super apps.

Inspired by China

This may sound familiar. Truecaller and others are trying to replicate Tencent’s playbook. The Chinese tech giant’s WeChat, an app that began life as a messaging service, has become a one-stop solution for a range of features — gaming, payments, social commerce and publishing platform — in recent years.

WeChat has become such a dominant player in the Chinese internet ecosystem that it is effectively serving as an operating system and getting away with it. The service maintains its own app store that hosts mini apps and lets users tip authors. This has put it at odds with Apple, though the iPhone-maker has little choice but to make peace with it.

For all its dominance in China, WeChat has struggled to gain traction in India and elsewhere. But its model today is prominently on display in other markets. Grab and Go-Jek in Southeast Asian markets are best known for their ride-hailing services, but have begun to offer a range of other features, including food delivery, entertainment, digital payments, financial services and healthcare.

The proliferation of low-cost smartphones and mobile data in India, thanks in part to Google and Facebook, has helped tens of millions of Indians come online in recent years, with mobile the dominant platform. The number of internet users has already exceeded 500 million in India, up from some 350 million in mid-2015. According to some estimates, India may have north of 625 million users by year-end.

This has fueled the global image of India, which is both the fastest growing internet and smartphone market. Naturally, local apps in India, and those from international firms that operate here, are beginning to replicate WeChat’s model.

Founder and chief executive officer (CEO) of Paytm Vijay Shekhar Sharma speaks during the launch of Paytm payments Bank at a function in New Delhi on November 28, 2017 (AFP PHOTO / SAJJAD HUSSAIN)

Leading that pack is Paytm, the popular homegrown mobile wallet service that’s valued at $18 billion and has been heavily backed by Alibaba, the e-commerce giant that rivals Tencent and crucially missed the mobile messaging wave in China.

Commanding attention

In recent years, the Paytm app has taken a leaf from China with additions that include the ability to text merchants; book movie, flight and train tickets; and buy shoes, books and just about anything from its e-commerce arm Paytm Mall . It also has added a number of mini games to the app. The company said earlier this month that more than 30 million users are engaging with its games.

Why bother with diversifying your app’s offering? Well, for Vijay Shekhar Sharma, founder and CEO of Paytm, the question is why shouldn’t you? If your app serves a certain number of transactions (or engagements) in a day, you have a good shot at disrupting many businesses that generate fewer transactions, he told TechCrunch in an interview.

At the end of the day, companies want to garner as much attention of a user as they can, said Jayanth Kolla, founder and partner of research and advisory firm Convergence Catalyst.

“This is similar to how cable networks such as Fox and Star have built various channels with a wide range of programming to create enough hooks for users to stick around,” Kolla said.

“The agenda for these apps is to hold people’s attention and monopolize a user’s activities on their mobile devices,” he added, explaining that higher engagement in an app translates to higher revenue from advertising.

Paytm’s Sharma agrees. “Payment is the mote. You can offer a range of things including content, entertainment, lifestyle, commerce and financial services around it,” he told TechCrunch. “Now that’s a business model… payment itself can’t make you money.”

Big companies follow suit

Other businesses have taken note. Flipkart -owned payment app PhonePe, which claims to have 150 million active users, today hosts a number of mini apps. Some of those include services for ride-hailing service Ola, hotel booking service Oyo and travel booking service MakeMyTrip.

Paytm (the first two images from left) and PhonePe offer a range of services that are integrated into their payments apps

What works for PhonePe is that its core business — payments — has amassed enough users, Himanshu Gupta, former associate director of marketing and growth for WeChat in India, told TechCrunch. He added that unlike e-commerce giant Snapdeal, which attempted to offer similar offerings back in the day, PhonePe has tighter integration with other services, and is built using modern architecture that gives users almost native app experiences inside mini apps.

When you talk about strategy for Flipkart, the homegrown e-commerce giant acquired by Walmart last year for a cool $16 billion, chances are arch rival Amazon is also hatching similar plans, and that’s indeed the case for super apps.

In India, Amazon offers its customers a range of payment features such as the ability to pay phone bills and cable subscription through its Amazon Pay service. The company last year acquired Indian startup Tapzo, an app that offers integration with popular services such as Uber, Ola, Swiggy and Zomato, to boost Pay’s business in the nation.

Another U.S. giant, Microsoft, is also aboard the super train. The Redmond-based company has added a slew of new features to SMS Organizer, an app born out of its Microsoft Garage initiative in India. What began as a texting app that can screen spam messages and help users keep track of important SMSs recently partnered with education board CBSE in India to deliver exam results of 10th and 12th grade students.

This year, the SMS Organizer app added an option to track live train schedules through a partnership with Indian Railways, and there’s support for speech-to-text. It also offers personalized discount coupons from a range of companies, giving users an incentive to check the app more often.

Like in other markets, Google and Facebook hold a dominant position in India. More than 95% of smartphones sold in India run the Android operating system. There is no viable local — or otherwise — alternative to Search, Gmail and YouTube, which counts India as its fastest growing market. But Google hasn’t necessarily made any push to significantly expand the scope of any of its offerings in India.

India is the biggest market for WhatsApp, and Facebook’s marquee app too has more than 250 million users in the nation. WhatsApp launched a pilot payments program in India in early 2018, but is yet to get clearance from the government for a nationwide rollout. (It isn’t happening for at least another two months, a person familiar with the matter said.) In the meanwhile, Facebook appears to be hatching a WeChatization of Messenger, albeit that app is not so big in India.

Ride-hailing service Ola too, like Grab and Go-Jek, plans to add financial services such as credit to the platform this year, a source familiar with the company’s plans told TechCrunch.

“We have an abundance of data about our users. We know how much money they spend on rides, how often they frequent the city and how often they order from restaurants. It makes perfect sense to give them these valued-added features,” the person said. Ola has already branched out of transport after it acquired food delivery startup Foodpanda in late 2017, but it hasn’t yet made major waves in financial services despite giving its Ola Money service its own dedicated app.

The company positioned Ola Money as a super app, expanded its features through acquisition and tie ups with other players and offered discounts and cashbacks. But it remains behind Paytm, PhonePe and Google Pay, all of which are also offering discounts to customers.

Integrated entertainment

Super apps indeed come in all shapes and sizes, beyond core services like payment and transportation — the strategy is showing up in apps and services that entertain India’s internet population.

MX Player, a video playback app with more than 175 million users in India that was acquired by Times Internet for some $140 million last year, has big ambitions. Last year, it introduced a video streaming service to bolster its app to grow beyond merely being a repository. It has already commissioned the production of several original shows.

In recent months, it has also integrated Gaana, the largest local music streaming app that is also owned by Times Internet. Now its parent company, which rivals Google and Facebook on some fronts, is planning to add mini games to MX Player, a person familiar with the matter said, to give it additional reach and appeal.

Some of these apps, especially those that have amassed tens of millions of users, have a real shot at diversifying their offerings, analyst Kolla said. There is a bar of entry, though. A huge user base that engages with a product on a daily basis is a must for any company if it is to explore chasing the super app status, he added.

Indeed, there are examples of companies that had the vision to see the benefits of super apps but simply couldn’t muster the requisite user base. As mentioned, Snapdeal tried and failed at expanding its app’s offerings. Messaging service Hike, which was valued at more than $1 billion two years ago and includes WeChat parent Tencent among its investors, added games and other features to its app, but ultimately saw poor engagement. Its new strategy is the reverse: to break its app into multiple pieces.

“In 2019, we continue to double down on both social and content but we’re going to do it with an evolved approach. We’re going to do it across multiple apps. That means, in 2019 we’re going to go from building a super app that encompasses everything, to Multiple Apps solving one thing really well. Yes, we’re unbundling Hike,” Kavin Mittal, founder and CEO of Hike, wrote in an update published earlier this year.

And Reliance Jio, of course

For the rest, the race is still on, but there are big horses waiting to enter to add further competition.

Reliance Jio, a subsidiary of conglomerate Reliance Industry that is owned by India’s richest man, Mukesh Ambani, is planning to introduce a super app that will host more than 100 features, according to a person familiar with the matter. Local media first reported the development.

It will be fascinating to see how that works out. Reliance Jio, which almost single-handedly disrupted the telecom industry in India with its low-cost data plans and free voice calls, has amassed tens of millions of users on the bouquet of apps that it offers at no additional cost to Jio subscribers.

Beyond that diverse selection of homespun apps, Reliance has also taken an M&A-based approach to assemble the pieces of its super app strategy.

It bought music streaming service Saavn last year and quickly integrated it with its own music app JioMusic. Last month, it acquired Haptik, a startup that develops “conversational” platforms and virtual assistants, in a deal worth more than $100 million. It already has the user bases required. JioTV, an app that offers access to over 500 TV channels; and JioNews, an app that additionally offers hundreds of magazines and newspapers, routinely appear among the top apps in Google Play Store.

India’s super app revolution is in its early days, but the trend is surely one to keep an eye on as the country moves into its next chapter of internet usage.

Grocery delivery startup Honestbee is running out of money and trying to sell

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Honestbee, the online grocery delivery service in Asia, is nearly out of money and trying to offload its business.

The company has held early conversations with a number of suitors in Asia, including ride-hailing giants Grab and Go-Jek, over the potential acquisition of part, or all, of its business, according to two industry sources with knowledge of the talks.

Founded in 2015, Honestbee works with supermarkets and retailers to deliver goods to customers using its store pickers, delivery fleet and mobile apps. The company is based in Singapore and operates in eight markets across Asia: Hong Kong, Singapore, Taiwan, Thailand, Indonesia, Malaysia, Philippines and Japan. In some markets it has expanded to food deliveries and, in Singapore, it operates an Alibaba-style online/offline store called Habitat.

The company makes its money by taking a cut of transactions from consumer transactions, while it also monetizes delivery services separately.

Despite looking impressive from the outside, the company is currently in crisis mode due to a cash crunch — there’s a lot happening right now.

From talking to several former and current staff, TechCrunch has come to learn that Honestbee is laying off employees, it has a range of suppliers who are owed money, it has “paused” its business in the Philippines, it has closed R&D centers in Vietnam and India, it isn’t going to make payroll in some markets and a range of executives have quit the firm in recent months.

Honestbee’s Habitat store includes a cashless and automated checkout experience, among other online-offline services

The issue is that the company is running out of money thanks to a business model with tight margins that’s largely unproven in Asia Pacific.

One source told TechCrunch that the company doesn’t currently have the funds to pay its staff this month. A source inside the company confirmed that Honestbee has told Singapore-based staff that they won’t be paid in time, but it isn’t clear about employees based in other markets. Previously, staff have been paid inconsistently — with late salary payments sent as bank transfers happening twice this year, according to the source.

One reason that the Philippines business has closed temporarily — as Tech In Asia first reported this week — is that it is out money, and waiting on Honestbee HQ in Singapore to provide further capital. Already, the saga has proven to be too much for Honestbee’s head of the Philippines — Crystal Gonzalez — who has quit the company, according to a source within Honestbee Philippines.

Gonzalez helped build Viber’s business in the Philippines, where it is a top messaging player, and she was previously with Yahoo before launching Honestbee. She is said to have grown frustrated at a lack of funds when the Philippines is the company’s best-performing market on paper.

Indeed, the situation is so dire that suppliers and partners have been paid late, or left unpaid entirely, in the Philippines and other markets. Honestbee takes payment for grocery deliveries, after which it is supposed to provide the transaction, minus its cut, to its supermarket partners. But it has been slow to pay vendors, with two in Singapore — FairPrice and U Stars — cutting ties with the startup.

Unclear financing

On the subject of financials, Honestbee looks to be toward the end of its runway.

The company has always taken a fairly secretive line on its financing. On launch, it announced a $15 million Series A investment from Formation8, a Korean firm where Honestbee CEO Joel Sng was a co-founder, but it has said nothing more since. Tech In Asia dug up filings last year that show it has raised a further $46 million from more Korean investors, but the startup declined to comment on its financing when contacted by TechCrunch.

It looks like that capital is nearly gone, at least based on what has been declared.

Internal numbers for Honestbee in December 2018, seen by TechCrunch, show that it lost nearly $6.5 million, with around $2.5 million in net revenue for the month. GMV — the total amount of transactions on its platform before deductions to partners — reached nearly $12.5 million in December, but costs — chiefly discounts to lure new customers and online marketing spend — dragged the company down. A former employee said that monthly retention is often single-digit percent in some markets because of the “outrageous” use of coupons to hit short-term revenue goals.

That internal data showed that the Philippines business accounted for around 40 percent of Honestbee’s overall GMV, which backs up Gonzalez’ apparent frustration at a lack of investment. That said, the Philippines unit remains some way from profitability, with a net loss of more than $1 million in December.

High burn rate

Three markets — Singapore, the Philippines and Taiwan — accounted for more than 80 percent of GMV and net income, making it unclear why Honestbee continues to operate in other countries, including the expensive Japanese market, when its funding level is perilously low.

Brian Koo, whose family controls LG, is listed as a shareholder for both of Honestbee’s ventures registered in Singapore. His Formation 8 VC firm has provided significant funding for the startup.

More pertinently, operating at that burn rate would give Honestbee less than 10 months of runway if it used the $61 million capital float that it is known to have raised. That suggests that the company has raised more money; however, none of the sources who spoke to TechCrunch were able to verify whether there has been additional fundraising.

Current and former employees explained that Honestbee doesn’t have a CFO and that all high-level decisions, and particularly those around budgets and spending, are managed by CEO Sng and his right-hand man, Roger Koh, whose LinkedIn lists his current job as a principal with Formation 8.

Filings in Singapore indicate that Honestbee has $55.9 million in assets through two registered companies. A common shareholder across the two is Brian Koo, a member of the LG family that founded Formation Group, the parent behind the Formation 8 fund.

Layoffs and a potential sale

While the financials are hazy, it is very clear that Honestbee is up against it right now.

The company released a statement earlier this week that makes some admissions around layoffs and restructuring but still glosses over current struggles:

In 2014, honestbee started in Singapore with the mission of providing a positive social and financial impact on the lives and businesses that we touch. Today, we are a regional business with footprints in Hong Kong, Thailand, Indonesia, Taiwan, Philippines, Japan and Malaysia.

Over the years, we have continued to be committed to our staff, partners and consumers. We have made good progress to implement new process and ways of working to remain efficient and relevant in the ever-changing business environment. The launch of habitat by honestbee in Singapore was a valuable lesson for us where it showed the potential growth in the O2O business and *it has been voted one of the must-see retail innovations in the world this year.

Following a strategic review of our company’s business, we are temporarily suspending our food verticals in Hong Kong and Thailand to simplify what we do and how we do it to better meet what our consumers want. Some roles within the organization will no longer be available. Approximately 6% of our global headcount in the organization are affected.

The status of honestbee in the remaining markets remain unchanged as we evaluate and we will continue to operate and contribute to honestbee Pte Ltd.

Sources close to the company told TechCrunch that more job losses are likely to come beyond the six percent in this statement. Executives who saw the writing on the wall have left in recent months, including the heads of business for Japan and Indonesia, a senior member of the team behind Habitat and the company’s head of people. One executive hired to raise capital for Honestbee quit within a month; he declined to comment and doesn’t list the company on his LinkedIn bio.

Secondly, Honestbee’s temporary suspension of food services in Hong Kong and Thailand isn’t likely to have a huge impact on its overall business, as groceries are the primary focus and neither market is particularly huge for the company. While Habitat has gotten attention for its forward-thinking, a physical retail store will require significant capital and it is likely, in its early days, to only increase the burn rate. Sources in the company told TechCrunch that, already, it has switched suppliers for some items as invoices went unpaid.

Despite the chaos, the potential of a sale is real.

Fresh from a recent $1.5 billion Vision Fund investment with the promise of $2 billion more this year, Grab — which is valued at $14 billion — is on a spending spree.

The Singapore-based company has pledged to make at least half a dozen acquisitions in 2019 and a deal to boost its nascent food and grocery play in Southeast Asia has some merit. Grab has the challenge of competing with Go-Jek, its $9.5 billion-valued rival that built a strong offering in Indonesia and is expanding across Southeast Asia with an emphasis on its food delivery. Grab, meanwhile, is active in eight markets across Southeast Asia and is now actively expanding from transportation services to food and more.

Likely adding to the frustration for Honestbee, its rival HappyFresh this week announced a $20 million investment. HappyFresh has undergone tough times, too. It pulled out of markets in 2016 to make its business more sustainable and today its CEO Guillem Segarra told TechCrunch that it is now operationally profitable.

Honestbee declined to respond to a range of questions from TechCrunch on whether it has plans to sell its business, its financing history and whether it has delayed paying employees.


If you have a tip about this story or others, you can contact TechCrunch reporter Jon Russell in the following ways:

  • DM to @jonrussell on Twitter
  • Email jr@techcrunch.com
  • For PGP use the public key listed on MIT’s keyserver (here) or jonrussell@protonmail.com
  • Contact directly for WhatsApp or Signal number

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