Food and grocery delivery company Honestbee is suspending some of its operations in Asia and cutting its global headcount by 10 per cent as part of its ongoing strategic review.
A company spokesman said yesterday that Honestbee will be stopping its services in Hong Kong and Indonesia and its food business in Thailand and temporarily suspending its operations in Japan and the Philippines.
The review was necessary to help the company focus and align its regional business, he added.
Honestbee was responding to media reports last week that the company was running low on funds, and that it was looking to sell its operations to technology company Grab and ride-hailing app GoJek.
The home-grown company also addressed reports that it has been laying off employees, delaying payroll and that it owed suppliers money.
Referring specifically to suggestions that the company had been dragging its feet in making payments, the spokesman said: "We would like to stress that this is untrue. We will ensure that all employees across all markets, including Singapore, are paid in a timely manner.
"In addition, we are also committed to fulfilling our financial obligations to all (contractors), partners and vendors."
Asked about reports that Honestbee was trying to sell some of its operations to rivals, Grab said that it does not respond to speculation, while GoJek declined to comment. Honestbee's statement also did not address the alleged sale.
The Honestbee spokesman added that the launch of hypermarket Habitat last October marked the next phase in the company's evolution as a food player.
Occupying 60,000 sq ft of space in an industrial building at Boon Leat Terrace in Pasir Panjang, Habitat is a tech-enabled grocery and dining concept.
A former employee who left Honestbee earlier this year told The Straits Times that the company held a town hall meeting last week to address media reports that funds were running low.
He said the reports had come as a surprise to him.
Bosses assured employees during the town hall that the company has sufficient funds, he added.
Employees were also told during an earlier town hall that Habitat was profitable and the company was seeking to raise more funds, the former employee said.
He stressed that he did not get a sense that the company was not doing well when he resigned to take up a better offer. He also said operations were shut down in some countries "primarily because they were not performing".
Private companies such as Honestbee are not obligated to disclose its financials to the public, unlike listed companies.
Associate Professor Lawrence Loh of the National University of Singapore said: "Start-ups often operate in the domain that is not covered by good governance practices especially in disclosures and oversights.
"While it is reasonable to accord fledgling start-ups some space for unfettered growth, there are key risks for stakeholders like employees and investors," said Prof Loh, who is also the director of the Centre for Governance, Institutions and Organisations.
"We need to seriously strike a good balance between business growth and stakeholder protection."
CIMB Private Banking economist Song Seng Wun said that start-ups face low entry barriers in the industry but can find it difficult to stay in the game, especially as competition heats up.
Honestbee was one of the early movers during the rise of Singapore's on-demand economy in the mid-2010s.
Its competitors include RedMart, which was bought over by Alibaba-backed Lazada in 2016, as well as traditional brick-and-mortar supermarkets such as NTUC FairPrice, Cold Storage and Giant, which have a growing online presence and also provide deliveries.
Pointing out that the space occupied by Honestbee was becoming crowded, Mr Song said: "More businesses are entering the industry."