HonestBee - Not Too Honest

Grocery delivery startup - honestbee - has no funds available to settle outstanding debts to former staff, vendors, and other unsecured creditors, amounting to S$319.9 million. The company’s sole secured creditor, Formation Group, has reportedly recovered approximately S$700,000 from the assets of honestbee, a far cry from the US$4 million worth of debentures held by the venture capital. Numerous former employees of honestbee are also still awaiting unpaid salaries.

The liquidator appointed for honestbee, was only able to recover around S$720 from excess payments related to “electrical supplies.” Following a creditors’ meeting on May 18, the liquidator is planning to seek approval from the High Court to discharge itself from its responsibilities and dissolve honestbee.

Founded in 2015 by three Singaporean entrepreneurs — Joel Sng, Isaac Tay, and Jonathan Low — honestbee quickly gained momentum as an e-grocer. Over the years, it expanded beyond grocery delivery services to offer other services such as food delivery and laundry services. 

The company experienced remarkable success within months of its operation and had successfully established a presence in eight countries across Asia, including Taiwan and Japan.

Poor management - However, honestbee’s fortunes took a downturn in 2019, leading to its eventual downfall. The company faced a financial crisis, due to poor capital management. The company made lavish purchases, including a property in Japan, which was worth about US$1.1 million. The Company went on to create multiple shell companies, which directed honestbee to make payments to these entities in exchange for their products, all while keeping these transactions undisclosed to investors.