(Editor’s note: A previous version of the story has stated that Flash Coffee has filed for liquidation. Flash has clarified that this applies only to its Singapore entity. An official statement by Flash Coffee has been added to this story.)
Rocket Internet-backed Flash Coffee has filed for provisional liquidation in Singapore, according to a regulatory filing submitted to the Accounting and Corporate Regulatory Authority (ACRA) this week.
BDO Advisory has been appointed as the firm’s provisional liquidator, per a resolution signed by Flash Coffee co-founders David Brunier and Sabastian Hannecker. The company’s board of directors had earlier filed a notice with ACRA on Wednesday of its inability to continue business due to liabilities.
“…We have ceased operations in Singapore today, comprising 11 stores out of over 200 global stores. This decision wasn’t made lightly, especially as we have nothing but love for our team and our customers in Singapore,” said a Flash Coffee spokesperson in an email statement.
Flash Coffee further emphasised its commitment to building a profitable and sustainable business as it seeks to double down on its most promising markets.
“Most of our markets have demonstrated tremendous traction on top of a healthy foundation and show strong unit economics and future growth potential, with some of the markets nearing EBITDA breakeven in the coming months already… We remain firm in our mission to serve up high-quality coffee across Asia and likely some additional markets in the medium term, and stay committed to scaling our business sustainably in the long term,” added the spokesperson.
The move to wind up operations comes days after Flash Coffee’s baristas in Singapore were said to have gone on strike. A TikTok post showed a sign hanging at one of the outlets citing the firm’s inability to pay salaries.
The Asian grab-and-go coffee chain was already in the midst of shuttering stores across the region. It shut down 10 stores in Taiwan early this year after closing two in Japan about one and a half years ago. In Singapore, several Flash Coffee outlets were also visibly shut or non-operational, raising speculations that the firm might pull out of the country completely.
Flash Coffee’s moves to downsize are taking place at a difficult time for startups regionally and globally. The firm was reported by DealStreetAsia to have struggled to fundraise in the middle of this liquidity crunch.
The startup was also facing stiff competition from new and emerging players like China’s Luckin Coffee and Indonesia’s Kopi Kenangan and Fore Coffee, all three of whom are driving an aggressive overseas push into new markets like Singapore, Malaysia, and elsewhere.
However, it was Flash Coffee’s business model and growth-at-all-costs approach that industry observers have often flagged as untenable for the company.
The asset-heavy nature of its business model — due to its equipment and brick-and-mortar stores — also raised questions on whether F&B chains could deliver VC-type growth for shareholders. Flash Coffee does not run a franchise model.
Co-founder and CEO Brunier had told DealStreetAsia two weeks ago that the firm was reviewing its performance and strategy across all markets and outlets to scale its business sustainably in the long run. He added that Flash Coffee had also received interest from “several potential strategic partners” in recent months.
The startup was founded in 2020 by former foodpanda chief marketing officer Brunier and ex-Bain & Company executive Hannecker. The Singapore-headquartered firm is backed by White Star Capital, Delivery Hero, Global Founders Capital, Rocket Internet, Conny & Co, Geschwister Oetker Beteiligungen, OurCrowd, and others.
According to DealStreetAsia’s DATA VANTAGE, Flash Coffee has raised over $68 million since inception and commands a valuation of about $200 million.
