HappyFresh shuts down in M’sia, its history of funding & expansion

For the past seven years, grocery delivery service HappyFresh has had a tumultuous journey, one which has come to an end in Malaysia.

Its rise and ultimate fall have been recorded through numerous articles. But to save you the time of filing through the company’s past records, we’ve compiled a list of HappyFresh’s memorable chapters in Malaysia, organised in a linear narrative.

Birth of a company

HappyFresh was founded in October 2014, modelling itself after Y Combinator alum Instacart, established in California two years prior.

The Indonesian-based company had seven co-founders, each one a seasoned tech player in their own right.

The original CEO, CTO, and COO of HappyFresh / Image Credit: HappyFresh

CEO Markus Bihler had years of experience as a private equity investor and had served as CEO of the European company Tirendo.

Benjamin Koellmann was the COO at Lazada group before taking on the same title at HappyFresh.

CTO Fajar Budiprasetyo had a stint in Yahoo! and co-founded two other companies before HappyFresh.

Dr Konstantin Lange served as CFO, with previous experience in The Boston Consulting Group and a PhD in Finance.

Before becoming CCO at HappyFresh, Kai Kux was COO at iMoney Group. Founding investor and executive chairman Tim Marbach had invested in numerous other companies, while Monk’s Hill Venture’s Stefan Jung stepped on as an advisor.  

It officially begins

On March 10, 2015, HappyFresh made its official debut after a month or so of being an invite-only platform.

HappyFresh was reported to have an undisclosed “single-digit million US$ pre-round A financing” (seven-digit figure).

Although based in Indonesia, it seems like the app actually started its services in Malaysia first, according to an article by Tech in Asia.

Series A round & regional expansion

In September 2015, HappyFresh raised US$12 million in its Series A round. Led by Vertex Ventures and Sinar Mas Digital Ventures, it also saw participation from Asia Venture Group, BEENEXT, Ardent Capital, 500 Startups (now 500 Global), and Cherry Ventures.

According to a press release then, the on-demand grocery delivery app had successfully expanded to Thailand and Taiwan.

In March 2016, it also made its debut in the Philippines.

Image Credit: HappyFresh

Series B & exiting the Philippines & Taiwan

While announcing its Series B funding round, HappyFresh simultaneously withdrew from Taiwan and the Philippines.

The amount raised for HappyFresh’s Series B was undisclosed, but its CEO had reported that the amount was higher compared to its Series A round.

It was Monday (August 29, 2016) when it announced its departure from Taiwan and the Philippines to concentrate on Malaysia, Indonesia, and Thailand.

According to Techcrunch, this news came three days earlier on Friday to a staff of nearly 1,000.

Image Credit: HappyFresh

Difficult times & the changing of CEOs

In January 2017, news that HappyFresh’s CEO had changed broke. According to LinkedIn, though, the change from Markus Bilher to Guillem Segarra actually occurred in November 2016.

An article by Tech in Asia reported that “the years 2016 and 2017 were the most difficult for the company”. This period saw HappyFresh going “back to the drawing board” to focus on unit economics, logistics, and new business units.

According to the article, these measures allowed HappyFresh to start seeing positive margins.

Resurgence with Series C

Perhaps thanks to the aforementioned changes, HappyFresh saw a turn for the better in 2019, raising US$20 million for its Series C.

The round was led by the Mirae Asset-Naver Asia Growth Fund, with participation from Line Ventures, Singha Ventures, and also Grab Ventures (the investment arm of Grab).

Returning investors included Vertex Ventures, Sinar Mas Digital Ventures, 500 Startups, and BeeNext.

grab
Middle three from left to right: Guillem Segarra, CEO of HappyFresh; Anthony Tan, Group CEO & Co-founder, Grab; Jerald Singh, Head of Product at Grab (and GrabFresh delivery partners and shoppers) / Image Credit: Grab

According to TechCrunch, the fresh funds would be used by HappyFresh to “double down on technology”, which could increase personalisation for customers and provide more efficient logistics.

Pandemic breakthrough & upward growth

As we all know, 2020 was the year of the coronavirus, where everyone became stuck in their own homes. It was a difficult time, one that saw “volatile traffic” on the HappyFresh platform, according to Tech in Asia.

“HappyFresh has been experiencing a 10x to 20x growth across the three countries it operates in as it sees a shift in customers’ behaviour toward online groceries,” reads the Tech in Asia article from 2020 itself.

In those moments of crisis, HappyFresh had served as a lifesaver for Malaysians, Thais, and Indonesians.  

Expanding into having its own supermarkets

Earlier this year in July 2022, HappyFresh officially launched its line of cloud warehouses in Malaysia, named HappyFresh Supermarket.

In an interview with Vulcan Post, the company’s chief growth officer, Johan Antlov, shared that the move was for them to build their own paths and have end-to-end control over the whole HappyFresh experience.

Temporary suspension of operations

That experience came to a standstill on September 8, 2022. The HappyFresh app suddenly featured a post saying that all stores on its platforms would be temporarily closed.

This came after an article from Bloomberg that HappyFresh was going through some financial problems, reportedly having hired turnaround firm Alvarez and Marsal to review its accounts.

According to the Bloomberg article, the Jakarta-based company had at least US$97 million (about RM437 million) in debt financing, and some of the company’s senior executives had allegedly stopped handling their day-to-day duties. 

HappyFresh Malaysia’s automated response on Facebook at the time shared that the company was underdoing organisational restricting and strategizing to ensure business continuity.

It also shared that HappyFresh’s business operations will be placed on hold temporarily until the company had reached a definitive and sustainable solution.

A short-lived comeback

On September 9, Vulcan Post learnt that the app had silently resumed its operations, at least for that day.

However, the only vendor open for deliveries was HappyFresh Supermarket, and even then, not all warehouse locations were available.

The Vulcan Post team was able to order from the Bangsar location. When asked, the HappyFresh rider who arrived said that he wasn’t sure whether the service would continue the following week.

A funding win

Amidst the financial struggles and board reshuffling, HappyFresh managed to secure undisclosed funding from investors. Announced on September 21, this enabled the company to resume operations in Indonesia.

However, things were still uncertain for its Thailand and Malaysia operations, with Bloomberg reporting that the company was “considering options”.

Bowing out of Malaysia and Thailand

At long last, HappyFresh officially announced its withdrawal from Malaysia and Thailand on September 22. This announcement came via the company’s social media accounts from the two regions.

“It is with a heavy heart that the delivery of this message will be our last delivery to you,” a Facebook post from HappyFresh Malaysia reads.

Image Credit: HappyFresh

Thanking its customers for the past seven years, HappyFresh cited the current economic condition as why it was “left with no choice but to cease operations, effective immediately”.

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HappyFresh’s official withdrawal from Malaysia may serve as a signal for the dwindling demand for grocery delivery services now that the country is in the endemic phase.

Still, Malaysians who have been relying on HappyFresh have many other alternatives remaining, some of which we have outlined in another article.

With all of HappyFresh’s original founders having long moved on to other companies, it seems like its customers—at least in Malaysia and Thailand—must, too.  

  • Read more articles we’ve written about HappyFresh here.