Flash Coffee’s Regional Resilience Amidst Singapore Closure
When Indonesia-based coffee chain Flash Coffee abruptly shuttered its 11 Singapore outlets in October, it raised doubts about the financial stability of its more comprehensive Southeast Asian operations. But the startup is now clarifying that its regional business remains robust despite exiting the city-state.
Backed by Rocket Internet and Delivery Hero, Flash Coffee states it is “nearing EBITDA breakeven in the coming months” in key markets like Indonesia, where all 93 stores are profitable.
The chain achieved this despite fierce competition from rivals like Fore Coffee and Kopi Kenangan in Indonesia. Earlier this year, Flash Coffee secured around $10 million in fresh funding, extending its $40 million Series B round led by White Star Capital in 2022.
Navigating Challenges: Flash Coffee’s Competitive Landscape
However, Flash admitted its Singapore outlets lagged behind rivals as consumer patterns changed post-pandemic. Though performance improved, the company ultimately prioritized markets closer to profitability.
Controversy arose when Flash Coffee entered voluntary liquidation in Singapore without paying all employee wages and benefits. According to experts, directors of insolvent firms must balance creditors’ interests when making shutdown decisions.
Navigating Liquidation Controversy: A Strategic Retreat
Flash stated that outstanding Singapore staff payments are prioritized and should be fully covered once liquidation assets are sold. However, some affected employees are still seeking assistance in recouping owed compensation.
Flash Coffee defended liquidation as the only viable exit option, expressing regret over unpaid debts. By law, directors cannot make payments until an insolvency filing.
While painful in Singapore, the retreat appears strategic in focusing resources on more profitable markets like Indonesia. With steady regional expansion still underway, Flash Coffee aims to chart a brighter future after this hurdle.
