On Thursday (12 Oct), news about Flash Coffee “in liquidation – creditors’ voluntary winding up” was all over Singapore and regional media. 

Stores were shut in Singapore, and a notice on staff strike over unpaid salaries went viral on social media. 

Flash Coffee’s collapse has not been a surprise – experts quickly went to social media to point out that Flash Coffee went too fast (i.e. “Flash”) and failed to build a solid foundation. 

That’s certainly true – although one caveat is that tech-enabled coffee chains could actually be built fast, with the vast amount of know-how and technological tools available in the market. 

For example, Luckin Coffee was founded less than 2 years before Flash, and is now a profitable business at scale (>10,000 stores, and bigger than Starbucks in China). Despite the scandal of number inflation that led to delisting and ousting of the founding team, the tech, product & operational infrastructure they built in the early days was essential for the company’s current success. 

Flash Coffee has been very different from Luckin, here are some of our thoughts: 

  1. Flash Coffee team had experience and understanding in tech & internet, but not retail and (especially) F&B. They had to rely on hiring experienced executives on things like choosing store locations and product development. This is always risky when such core functions are not handled by founders in the early stages of a startup;
  2. There hasn’t been much tech being developed for Flash to differentiate from its competitors in a crowded market – subsidising through food delivery platforms does not count as tech;
  3. In comparison, Luckin is a tech business to the core, from obligatory mobile ordering to optimisation of product development, from in-store operations to digital vouchering (a.k.a. “user operations”). You can learn much more about Luckin’s innovations in Momentum Academy’s Sip, Innovate, Repeat workshop;
  4. Flash Coffee’s founders have been working very hard to raise money to fuel the growth from the onset. Oddly, if you look at the disclosed investor base, there are NO notable Asian names, for a business that operates entirely in Asia. We have spoken with quite a number of sophisticated consumer investors in the region, and they are all struggling to understand the exact value proposition (and/or defensibility) of Flash Coffee;
  5. The $50m funding announced in May 2023 was actually secured almost a year earlier. By the time of the announcement, the bulk of the money has already been spent. The announcement seemed to be designed to give would be investors or potential acquirers confidence, but we do not know how this could actually work in the chilling startup funding environment of 2023;
  6. As we understood from a number of sources, after the $50m cash infusion in 2022, the founding team decided to continue aggressive expansion. They seemed to be oblivious to the rapidly deteriorating funding environment. A shrewd strategy would have been what Shopee, Grab and everyone else was doing in 2022 – cutting costs, conserving cash, profitability and survival;
  7. As a result, Flash Coffee went into a vicious cycle over the past year or so. Founders had to spend more time in fundraising => as a result, they would inevitably spend less time on product and operations => operations would deteriorate when left unchecked => would be investors would become more cautious => founders had to spend even more time in fundraising => (the cycle goes);
  8. We discussed a lot of the hard lessons learnt during Chinese tech companies’ global expansion in the book “Seeing the unseen: behind Chinese tech giants’ global venturing”. Many parallels here as well – the problems in product is ultimately a result of bigger problems in leadership, organisation and people;
  9. Does anyone still remember the founder’s vision to “conquer Asia” back in Feb 2021? If you were Asian, would you find it remotely appropriate?

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].


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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.