HappyFresh Wins Funding, Revamps Board as Business Resumes
(Bloomberg) -- HappyFresh has secured funding from investors to resume online grocery operations in Indonesia, staving off a potential cash crunch fomented by the regional economic slowdown.
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The Instacart-style grocery delivery service said it’s restarting operations in its home market on Wednesday, after a strategic review. It will work with venture debt funds Genesis, Innoven and Mars on restructuring the business, HappyFresh said in a statement.
As part of a reshuffle, representatives of US firm Kroll will replace three former directors on its board, including Naver Corp.’s Lee Jung An. Jason Kardachi, who leads Kroll’s restructuring practice in Southeast Asia, will work with HappyFresh on its overhaul. The startup, which didn’t disclose the amount of new funding, said it will now focus on Indonesia while considering options for its businesses in Thailand and Malaysia.
Jakarta-based HappyFresh, which struggled this year to raise capital after a sharp downturn in the young online grocery sector, had hired turnaround firm Alvarez & Marsal Holdings LLC during a review of its financial situation, Bloomberg News reported this month. Chief Executive Officer Guillem Segarra, Chief Financial Officer Frederic Verin and Chief Operating Officer Christoph Krauss have been reinstated after stepping back from their day-to-day duties.
“We have gone through a lot,” Filippo Candrini, managing director of HappyFresh Indonesia, said in a statement. “Over the past weeks when we paused operations, we saw numerous comments from customers across various social media platforms stating their reliance on our service offering while requesting for the service to be resumed as soon as possible.”
Read more: HappyFresh Board Is Said to Hire Alvarez & Marsal for Review
Founded in 2014 as one of the first Instacart-style grocery delivery services in Southeast Asia, HappyFresh has raised at least $97 million in equity funding in addition to debt financing. Formally known as ICart Group Pte, it operates in Indonesia, Malaysia and Thailand. In February, the startup launched HappyFresh Supermarket to extend fresh and dry grocery accessibility by expanding its footprint of dark stores, or storage facilities where delivery staff pick up products from.
But the market for grocery delivery services has soured in the face of slowing economic growth, surging inflation and higher interest rates.
Grab Holdings Ltd., a Southeast Asian ride-hailing and delivery company and a backer of HappyFresh, said last month it decided to shut its dark-store operations in Singapore, Vietnam and the Philippines to cut costs and streamline its deliveries operations, retreating from the earlier strategy. And pandemic darling Instacart Inc., which was valued at $39 billion in a March 2021 funding round, slashed its internal valuation by about 40% a year later.
Alvarez & Marsal was the restructuring adviser that wound down Lehman Brothers Holdings’ operations about a decade ago. The global firm with more than 6,000 employees has expanded its Asia forensic technology team this year, and appointed Manas Tamotia, a 20-year consulting veteran and former chief strategy officer of HappyFresh, as a managing director to lead private equity for its Southeast Asia and Australia division.
(Updates with detail on restructuring in third paragraph)
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