Beijing-based Ofo bike-share startup raised $ 866 million in new financing led by Alibaba Group to fuel its expensive competition with Mobike, which is backed by Tencent, one of the world's biggest rivals. ;Ali Baba. Ofo and Mobike are the two largest bicycle sharing companies in China.
Ofo claims that it is the highest amount obtained by a bike sharing company up to now. Other participants in the round, which includes equity and debt financing, included Ant Financial (the financial subsidiary of Alibaba Group), Haofeng Group, Tianhe Capital and Junli Capital. Alibaba Group also led last year's Ofo $ 700 million series E, which was announced a month after Mobike revealed that it had received $ 600 million. E Series led by Tencent.
In a press release, Ofo's founder and CEO, Dai Wei, said: "As a world leader in the bike-sharing business, Ofo is going from a phase of rapid growth to a quality development phase. Ofo will continue to give priority to its customers and will lead the bike sharing industry with technological innovations and efficient operations. "
Founded in 2014, Ofo claims today to have a total of 200 million users, who generate 32 million transactions every day on its platform.
Ofo and Mobike have achieved valuations of more than a billion dollars and together hold more than 90% of the bicycle market in China (and are also developing in other countries). However, each of them would suffer from cash flow problems, largely because of the high cost of maintaining their fierce rivalry with each other, as well as dozens of other bike sharing startups that have emerged in recent years. But the market could not support so many competitors and China's "bike sharing bubble", which at one point counted about 60 startups, began to collapse year-round last.
Among the victims were Bluegogo, whose activities were partially taken over by Didi, China's largest carpool company, after the startup ran out of cash at the end of last year. Didi's presence on the bike-sharing market is another headache for Ofo and Mobike. Didi offers various bike sharing services through its application of partners, including Ofo, but that does not necessarily help. As Jon Russell of TechCrunch pointed out, it just means that commuters are using Didi's app even more and do not need to open or even install applications. bike sharing.
One solution would be to merge the two companies, but Alibaba and Tencent would be against the deal because everyone wants to take control of the bicycle market in China.