The Honestbee ex-chairman’s lonely fight to keep his dream alive

As embattled startup Honestbee was running out of money, ex-CEO Joel Sng was publicly flogged for its failures.

But internally, Brian Koo, grandson of the founder of Korean conglomerate LG, as well as the key investor of the grocery and food delivery service, was facing accusations.

In 2018, two Honestbee investors alleged that Koo had made deals that benefitted himself at the expense of the startup’s other shareholders.

In addition, despite claiming to be, “blessed with family fortune,” Koo had taken on debt in order to double down on the startup. He had also been slow to repay the money, multiple sources familiar with the company tell Tech in Asia. This raises questions about Koo’s ability to sustain his pet project in the months ahead.

More recently, the ex-chairman has committed to injecting an additional US$7 million into Honestbee. That’s on top of having invested tens of millions into the company – money which may never be recouped.

Honestbee is now racing to secure a new lifeline. It’s in advanced discussions with various parties to license its technology or start joint ventures outside of Singapore, the new CEO, Lay Ann Ong, said in a closed-door meeting with creditors.

Any potential investor or partner will have an important fact to consider: While Koo has resigned as the startup’s chairman, he appears to have retained influence in the company. He holds the purse strings of the firm, and two of his associates remain on the board.

Honestbee declined to comment on the story, and Koo did not respond to Tech in Asia’s messages.

Cracks started to show

Honestbee had been a rocket ship since 2015. Koo, as the key investor and dealmaker, had strung together US$80 million from various fund managers for the company by mid-2018, including US$28 million from his family and US$10 million from his own pockets, sources tell Tech in Asia.

The money was put into A Honestbee Pte Ltd, a special purpose vehicle set up to consolidate the startup’s funding. The capital was then funneled into Honestbee.

Despite the startup’s growing clout, two of its early investors were growing uneasy.

Through a lawyer, investment firms Frame Investment Capital and Finbold Limited alleged in July 2018 that Koo and Sng had breached their investment contract.

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Media catches on

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