Honestbee went from raising S$20 million in funding to owing S$247 million in just 4 years
4 years after raising S$20 million in a Series A round, Honestbee is facing its most challenging period yet.
As of August 2, 2019, Honestbee owes S$247 million to creditors.
According to Honesbee, this debt is made out of two types of debt; debt owed to trade creditors through the course of business and investment-related debt. Investment-related debt are convertible notes held by various investors. The bulk of these are held by Silicon Valley fund Formation Group, Brian Koo and associates and an SPV “A honestbee”.
The company confirmed a Business Times report that the company owed S$247 million to creditors.
The restructuring saw new CEO Ong Lay Ann take over from interim CEO Brian Koo.
In fact, Ong revealed that handling that debt was considered one of his utmost priorities in an earlier interview with BT.
Other measures taken to stem the debt included continued layoffs, 38 employees were fired, and an application to the High Court to commence court-supervised restructuring process.
This is to get a six-month moratorium against any legal proceedings that creditors might bring against it. A move that was used by Hyflux as well.
Hyflux has extended its moratorium four times now.
Honestbee’s former CEO, Joel Sng is also apparently facing legal troubles with creditors now, with BT reporting that Sng is being sued by a creditor of the company for the repayment of a S$5.23 million loan made to Honestbee.
Here’s how it got so bad
Image from Honestbee