As Honestbee sought $150m, its ex-CEO was absent from pitch meetings

Throughout 2018 and early 2019, the hype around Honestbee was peaking – but it was running out of cash.

There was no better time to fundraise, so it did just that. Brian Koo, the startup’s main backer, initially pursued valuations of over US$1 billion. Meanwhile, the Honestbee team was wooing investors in Singapore by using a more detailed version of the slide deck above.

An investor who attended one of those pitch meetings in March 2019 says that Honestbee was trying to raise a US$150 million round that would value the company at US$900 million post-funding.

“Secretive and shady”

But Joel Sng, the company’s CEO at the time, was hardly involved. Instead, Honestbee only sent a couple of junior employees who were barely out of college to the meeting.

“Such a massive round, and the founder didn’t want to make the trip down – it’s a sign of disrespect,” says the investor, who declined to be named.

Typically, companies with a valuation close to or over US$1 billion would have their finances scrutinized when they’re fundraising. However, Honestbee appeared “secretive and shady” about its numbers, according to the source, who works at a fund belonging to a large Singaporean corporation.

“They were unwilling to disclose what multiples we were getting into,” he observes. Whatever numbers the startup did share also didn’t add up: Honestbee said it had an annual gross merchandise value of US$132 million, which didn’t justify the valuation it sought.

Creating FOMO

Honestbee’s representatives hinted that an “undisclosed mega fund from Japan” was coming into the round, but they didn’t want to reveal the name, recalls the investor. When he asked if it was SoftBank, he saw their facial expressions change.

“I mean, there’s only a few mega funds in Japan,” he adds. “It was a way to create [a feeling of] FOMO (fear of missing out).”

Following that encounter, the Honestbee team pursued the source’s investment firm over email. Despite that, the investor was never connected to Sng or the management team.

An employee with knowledge of the fundraising confirms that apart from one possible occasion, Sng wasn’t present either when the company pitched to other well-known investors.

At best, Honestbee would send in Roger Koh, Sng’s then right-hand man, to those meetings.

By around April 2019, as Honestbee’s fundraising efforts faltered, it received a US$10 million offer from regional super app Grab in exchange for its technology, intellectual property, data, and some of its employees. Sng rejected the deal, which would have meant that Honestbee had to shut down. He and the team felt the company could still be salvaged.

“He was too arrogant. He really believed his own bullshit,” the ex-employee points out.

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