honestbee. How do we even start?
The startup that everyone wanted to work in a year ago has been in the limelight for all the wrong reasons. I won’t be surprised if dictionaries decide to include the word “honestbee” as a count noun for “an Instagram-worthy struggling company with countless debts”.
New reports now state that since the beginning of the year, the startup has been burning an average of S$8.7 million a month.
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I don’t know what coffee the bees have been having, but that’s a lot of money.
Cashflow of honestbee
Obviously, honestbee won’t have disclosed anything if not for their need to apply for some legal thingy to stop debt collectors from knocking on their door in the next six months.
And the more they disclose, the worse it looks from the outside.
Other than owing almost $1 million to ex-employees, the company’s balance sheet doesn’t look healthy, too.
According to The Business Times, the company is in a negative equity position of S$292 million on end-June, which means they’re in the red for that amount.
Also, a total of S$325.7 million debt (or any other costs) needs to be returned within a year.
But what about its assets?
Well, it owns about S$19.9 million in property, plant and equipment, and has about $902K in cash.
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Pretty shocking that they’ve got cash on hand #justsaying
As for its revenue (i.e. sales), they had a revenue of S$102 million in 2018, but spent S$116.5 million in goods and logistics.
It’s like a company selling you something at a loss for an entire year. Is that a hobby or a business, or have they let the word “growth” cloud their basic business sense?
But that’s not all: remember, that S$116.5 million is just for the goods and logistics. There’s also S$51.9 million paid for salaries that year, and many other expenses that are not included here.
Like gold coffee.
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As mentioned earlier, for this year, they’re still burning S$8.7 million a month, even when they’ve closed off so many businesses in several regions.
This feels like a friend who’s single and earns $20,000 a month, yet have Maggi Mee every day; where did the money go?
Maybe that friend donates all his money to charity lah. Who knows.
Reportedly Proposing a Scheme to Transfer Assets to a New Company
This will be chim, so let me try to break it down to Goody Feed language.
So, honestbee still has about S$20 million in assets and cash, right?
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And they owed about S$300 million.
Apparently, what they allegedly proposed is to transfer that S$20 million to a newly registered local company, say, honestant. A parent company will be set up in the US, which we’ll call honestcockroach,
Then creditors can choose to get the shares of honestcockroach instead of cash.
But of course you’re wondering: honestcockroach technically is only worth S$20 million – how to pay off $300 million?
I can only speculate that honestcockroach (or honestant) is supposed to be so profitable that each share is going to worth a lot more soon after.
Either that…or there’s more to this.
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But remember: these are just allegations, and that’s just a proposal. Maybe Facebook would come in and buy honestbee, and honestbee and Facebook can live happily ever after.
Who knows.
Would you be jailed for being half-naked in public? Well, the answer will shock you. Seriously. Watch this to the end and you'll understand:
