Honestbee rejected an offer from Grab; new deal between them “unlikely”

Photo credit: Honestbee

Honestbee has been in talks with Grab for a potential investment or acquisition, multiple sources familiar with the situation told Tech in Asia. The discussions had been going on for the past few weeks, with Grab conducting due diligence about Honestbee’s operations, infrastructure, and metrics.

However, Tech in Asia understands that Honestbee had earlier rejected an offer from Grab to acquire certain intellectual property and assets as it was not in the startup’s and shareholder’s “best interests.” Honestbee CEO Joel Sng said the same thing in a townhall meeting last week.

Meanwhile, talks with Go-Jek didn’t advance as far.

Moving ahead, a deal with either Grab or Go-Jek is unlikely, according to people familiar with the discussions.

Several sources added that Grab had been more interested in Honestbee’s groceries business, which includes its physical supermarket Habitat, than the food delivery business. Grab is an investor in HappyFresh, a grocery delivery startup.

Grab and Honestbee declined to comment on the story. Go-Jek and Grab, rivals for the super app crown in Southeast Asia, were just two of the players that Honestbee approached for its exit bid.

As Honestbee searches for an acquirer, it’s getting a lifeline. Sources also told Tech in Asia that employees – who faced uncertainty created by various media reports – were reassured at the latest townhall session held yesterday that they will receive their pay on time as the company had confirmed a new round of funding. Details regarding the sum of the investment and the identity of the investors were not revealed.

See: More coverage of recent Honestbee developments

However, the sources said that Sng wasn’t present at yesterday’s townhall, which was instead led by Roger Koh, Honestbee’s chief financial operations officer. The official explanation is that Sng is traveling at the moment.

The company is now deciding on what strategic steps to take going forward, according to the sources. They also noted that for Honestbee, food delivery appears to be a red ocean business in high-cost markets. Layoffs beyond the announced 10% of headcount may happen, depending on how the embattled startup performs.