Turning things around

WHEN Flash Coffee closed its Singapore business last month, it seemed that the worst might be over for the tech-enabled coffee chain. The chain defended its exit and said its regional business is still sound after consolidation. 

But as it turns out, when it rains, it pours – Flash Coffee’s Thailand business was sold off to Turn Capital in November. Elsewhere, the coffee chain’s Taiwan business also shuttered in March, declaring bankruptcy later in May. Turn Capital passed on acquiring the Taiwan business in April.  

The Taiwan bankruptcy mirrors the Singapore one, with Flash Coffee’s holding company being the largest creditor, and staff salaries left unpaid. Flash Coffee’s Taiwan business owes its parent company NT$110.4 million, and owes local staff another NT$3.7 million.

Now the company is left in only a few markets, including Indonesia, Hong Kong and South Korea. Indonesia, in particular, has been tapped as an engine of growth for the brand. Yet, it’s going head to head against strong rivals, including Kopi Kenangan.

Flash Coffee Thailand’s new investor, Turn Capital, is looking out for more distressed businesses with sound fundamentals. Having raised a maiden fund, it will invest in opportunistic deals in Asia as private valuations tumble.

Their targets? Companies that have hit a plateau, making them fall out of favour with venture capital. With money running out, Turn Capital plans to swoop in and turn the business around with its expertise. 

Turn Capital was started by Joseph Phua, co-founder of livestreaming operator 17Live, a target for business combination by Vertex Technology Acquisition Corporation. 

Turn Capital is targeting a final close of its maiden fund by year-end, though its fundraising target is undisclosed. Limited partners include Twitch co-founder Kevin Lin and former AC Milan footballer Keisuke Honda.

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