Chinese bike-sharing startup Ofo has secured $866 million in a investment round led by Alibaba group. This investment fuels the competition as two of the biggest bike-sharing companies go head to head. Tencent, one of the Alibaba’s biggest rivals, have invested in Mobike. Ofo claims to have the largest amount raised by a bike-sharing company till date. The round also saw participation from Ant Financial, Haofeng Group, Tianhe Capital and Junli Capital.
The Alibaba Group also led their previous round of financing which ended up raising $700 million. The financing round was announced just after Mobike closed a $600 million from Tencent.
Commenting on the investment raised, Dai Wei, founder of Ofo, said “As the global leader in the bike-sharing sector, Ofo has been transitioning from a phase of rapid growth to a stage of high-quality development. Ofo will continue to put our customers first and lead the bike-sharing industry with technological innovation and efficient operations.”
Founded by Dai Wei, Xue Dong, Yang Pinjie, Yu Xin, Zhang Yanqi, and Zhang Siding in 2014, the company claims to have over 200 million users who generate 32 million transactions a day. Both Ofo and Mobike have billion dollar valuations and combined hold over 90 percent of the China’s bike-sharing market.
Reportedly, both are having cash issues, due to the fierce rivalry with each other as well as other companies that have emerged in the recent past. The reports further suggests that Mobike is looking to raise another round from e-commerce giant Meituan. Due to the fierce pricing models, none of them have been able to go profitable.
The manufacturing logistics sector in China is exploding. Mobike claims to have set-up its factories in China with a production line to build 50,000 bikes each day.
With rumours talking about the merger between the two bike-companies, Ofo cleared the air by stating, “Ofo will drive long-term success independently with the continuing support of leading investors,” in its media release.