How Flash Coffee Went Stale

Singaporeans need no introduction to Flash Coffee.

After all, there were more than 20,000 searches for "Flash Coffee" from Singapore. On Fri Oct 13. As per Google Trends.

Here's how the story unfolded.

Event timeline

• Oct 18, 2019: Pre-seed. Raised US$2 mill.

• Aug 1, 2020: Seed. Raised US$3 mill.

• Apr 7, 2021: Series A. Raised US$15 mill.

• Jun 12, 2022: Series B1. Raised US$33 mill.

• Oct 16, 2022: Series B2. Raised US$5 mill.

• May 11, 2023: Series B2. Raised US$12 mill.

• Oct 12, 2023: Closed all 11 outlets in Singapore. Filed for winding up.

Surprised?

Let's turn the clock back. To how it all began.

Vision & Target Audience

To democratise premium coffee. Making it accessible to young tech-savvy professionals.

Positioning

"Tech-enabled" coffee chain. "Game-changing" technology.

David Brunier, CEO & Co-founder:

• "We see Flash Coffee as a tech company at its core ... plan to build a tech-driven powerhouse ... top-of-class operational processes and fully integrated value chain. Flash Coffee will also build a regional HQ in Singapore.”

• "Technology will bring the whole industry to the next level."

So far so good.

What did they have to show for it though? Their Flash Coffee App. With which you could order and pay for your coffee online ...

• And pick it up. At any of their stores. Island-wide.

• Or get it delivered. Through Foodpanda, GrabFood or Deliveroo.

Seems standard Online-to-Offline (O2O) commerce. Which part of it was 'game-changing'?

Product strategy

Award-winning menu. Of high-quality beverages. Made from 100% speciality grade Arabica coffee beans. At affordable prices. Starting at just S$3.00.

• Classic drinks: Flat White, Long Black, Cappuccino, Espresso etc.

• Innovative signature choices: Avocado Latte, Lemon/Lychee Espresso Soda, Nutella Latte, Latte Melaka, Milo Dinosaur Shake, Collagen Peach Latte, Collagen Apple Tea. And more ...

For this business model to be viable, Flash Coffee would need to keep its product costs under control. As well as operating expenses.    

Let's see if they did.

Award-Winning Baristas

Instagrammable latte art creations. Curated by Arnon Thitiprasert (2017 World Latte Art Champion), and Robby Firlian (2018 Indonesian Latte Art Champion). Served by "all-star" local on-the-ground baristas Alif Badri (Singapore Aero Press Champion) and Muhammad Nabihan (Singapore Brewer’s Cup Finalist).

• Talent must have come at a price, of course. Did the customer pay any premium for the perceived value though?

• And wait! How many would get to see them in action in the first place? If they expected customers to 'grab-and-go' without waiting in long queues? Or even have it delivered to them?

No Surcharge on Oat Milk

Flash Coffee partnered with Singapore manufacturer Oatside to serve plant-based oat milk as default. In all milk-based beverages across its stores in Singapore. At no extra cost. Didn't this generosity come at a cost to their bottom line?

Marketing Partnerships

• Flash Coffee experimented with a ‘shop-in-shop’ partnership. With salad bar Saladstop. To enable customers to grab healthy breakfast and lunch meals. Wraps, salads, grain bowls, egg-white bowls, oatmeal and the like. Along with coffee. But didn't this appeal to a health-conscious niche only?

• Flash Coffee launched its Push’n Boundaries merchandise capsule collection collaborating with outer-space inspired lifestyle brand AGLXY. Three streetwear-style tees, a metal pin and a sticker pack. Showcasing them in a video campaign across Asia. Where exactly was the win-win synergy in this partnership?

Aiming for Plastic Neutral

Since Nov 2021, Flash Coffee has financed the collection of 159,264 kg of plastic waste. In collaboration with green startup CleanHub.

Noble. Without a doubt. But all costs add up, don't they?

Headcount

Singapore Business Review, May 17, 2021: "Flash Coffee aims to revamp the company’s staffing models to enable ... outlets to have significantly higher output with less staff than comparable businesses. They created a concept that eliminates traditional business models' inefficiencies."

And yet ...

Vulcan Post, Mar 4, 2022: "(Flash Coffee) ... employs an army of 1,400 employees. In Singapore alone, it hires 250 staff across its head office and its 31 stores."

As we speak, the Careers page of the Flash Coffee website shows 38 job openings across their five offices:

• Corporate Development: 1.

• Data: 1.

• Engineering: 1.

• Finance: 3.

• Founders' Office: 2.

• Legal: 2.

• Logistics & Distribution: 3.

• Marketing: 5.

• Operational Excellence: 6.

• People & Talent: 2.

• Procurement: 1.

• Product Design: 2.

• Real Estate: 1.

• Retail Design: 1.

• Retail Operations: 1.

• Store Staff: 5.

• Venture Development: 1.

Notice the line-function-to-staff-function ratio. Or the tooth-to-tail ratio. As we call it in organisational jargon. That says it all, doesn't it?

Staff Welfare

David Brunier, Aug 30, 2021: "Empowering and supporting its employees is core to Flash Coffee’s brand values ... important for us to build a company that nurtures our employees, where everyone wins together and our team members are rewarded for their contribution."

And then there was reality ...

Business Times, Oct 14, 2023: "The coffee chain has not paid staff in Singapore their most recent monthly wages. Flash Coffee reportedly owes over US$10.2 mill to more than 150 creditors."

The VC Moneybags

• Rocket Internet: Pre-seed.

• Flash Ventures: Pre-seed.

• Delivery Hero: Seed, Series A, Series B1 and Series B2.

• Conny & Co: Seed, Series A, Series B1 and Series B2.

• White Star Capital: Series A, Series B1 and Series B2.

• Al-Dhow Engineering: Series B1 and Series B2.

• Global Founders Capital: Series A.

• OurCrowd: Series B1.

• Citadel: Series B2.

• Vulpes Ventures: Series B2.

• Geschwister Oetker: Series B2.

• DX Ventures; Series B2.

How often did they check Flash Coffee's homework? :)

Is there a bigger picture we missed seeing? Do let us know. In the comments below.

Until next time.