honestbee Woes: It Owed Over $247 Million, Laid off 38 People & Ex-CEO is Alleged Sued

Here’s some quick maths for you: honestbee was established in 2015. The amount of funding it has got is unknown, and their revenue is unknown, too.

But it’s now revealed that they had over $247 million of debt.

Let’s just say that they’ve $0 funding and $0 revenue (which obviously is impossible but anyways), which means on average, they burned $49.4 million a year, which works out to about $4 million a month.

Oh, wow. What gold coffee is the employees drinking?

No wonder their office looks like this:

Compared to ours, which looks like this (agak agak can see the size of our office and the so-not-Instagram-worthy desks lah):

So, what happened, and how did that debt appear out of nowhere? And what’s honestbee honestly going to do about it?

Here’s yet another episode of honestbee woes.

honestbee Appointed New CEO

If you’ve been binge-watching the honestbee Woes, you’d know that all the founders of honestbee have left, including co-founder and ex-CEO Joel Sng.

His role was taken over by one of the investors, Brian Koo. On 15 July 2019, a new CEO, Ong Lay Ann, was appointed. Unlike the previous CEO, Mr Ong is an experienced leader who has close to twenty years of leadership experiences in IT, commodities, real estate and infrastructure.

His first few key priorities are to restructure the company’s capital structure and resolve its debt.

And it seems like he’s a no-nonsense leader as he’s made the first drastic decisions.

Apply for Court Protection from Creditors + Laying off 38 People

Within two weeks, it’s clear that the new CEO isn’t going the “looks pretty outside but struggling inside” route: he has applied to High Court to commence a court-supervised restructuring process as it seeks six months of reprieve from creditors it owes over S$247.7 million to.

In other words, during the six months, creditors cannot use legal actions to seek back money from honestbee as they restructure. Of course it’s just temporary; they’ll still have to return the money eventually.

During the six months, the company can restructure “peacefully” without people knocking on their door to ask for money. They said, “honestbee has taken this imperative step to protect and preserve the value of its businesses while it restructures its operations across Asia. The court-supervised restructuring process is in the best interest of honestbee’s stakeholders as the company can focus on re-evaluating the business without interference; streamline operations, increase existing efficiencies and bring down the cost structure.”

It’s unknown who the creditors are, but its major creditors are convertible noteholders: people who have lent money to the company and can eventually convert the debt into the company’s shares.

This isn’t the only unpopular yet necessary move the new CEO has made.

Laid off 38 People in Singapore

In the pilot episode of honestbee Woes, it started with a 10% global lay-off of its staff.

Well, now, another 38 people in Singapore has been laid off, with them working in the operations and engineering department.

The startup said, “As a result of our reduced operations globally, the company has made a decision to rightsize the company in order to cut costs and streamline its business. Thirty-eight employees will be affected in Singapore…Their departures are not reflective of their performance, but rather due to the restructuring of our business operations in Singapore. The move is necessary to ensure that the company has the right structure in place for long-term stability and success.”

According to TODAYonline, some of the people who were laid off had already suffered from salary delays, but during this period, they’ve been helping each other to connect to different companies and opportunities.

With a plan to clear its debt and “rightsize” the company, we could be seeing the end of the honestbee Woes.

But it turns out that there’s a B plot in this entire saga.

Ex-CEO Allegedly Sued Over a Loan

Before you go, “Hey, didn’t honestbee just do that thingy that prevents others from suing them? Why now suddenly someone can get sued one?”

Hold your horses: the High Court filings were dated 19 July 2019, so the legal proceeding for this has been made prior to that “thingy”.

Apparently, according to The Business Times, co-founder and ex-CEO Joel Sng is allegedly being sued by a creditor of honestbee for the repayment of USD$3.8 million that was apparently loaned to honestbee.

Oh, wells, it seems like it’s really tough being a CEO of a struggling company. And the trouble won’t even after you’ve left #justsaying