Didi Chuxing, the Chinese ride-hailing giant with an aim to get into the bicycle category, has announced its investment of 'tens of millions' of US dollars into Ofo, a bike-sharing platform.
Didi Chuxing, the Chinese ride-hailing giant with an aim to get into the bicycle category, has announced its investment of ‘tens of millions’ of US dollars into Ofo, a bike-sharing platform. According to a statement released by Didi, this deal is part of a ‘multi-layered partnership’ in the area of urban mobility. Didi informed that the investment was of ‘tens of millions’ of dollars yet did not reveal the exact equity amount picked up by it. Ofo had reportedly raised $4 million as investment earlier in September. The Chinese taxi giant did not specify if that capital was a part of it or extra.
In the year 2015, rivals Didi Dace and Kuaidi Dache merged together which gave birth to Didi Chuxing. Its services are similar to the global taxi-hailing giant Uber. Services like taxis, carpooling, drivers and premium cars are offered by Didi on smartphone-based cars. Didi is the undisputable king in this sector in China. This made a distance second, Uber to merge its China operations with Didi in a $35 billion deal just some time back. This move helped Didi to get a whopping contribution of $1 billion from the tech giant Apple as funding, which totally amounted to a huge $7.3 billion round of funding.
Ofo, on the other hand, has been going the same way since 2014, except it was only for bicycles. The startup was launched at the Peking University campus as a small student project which went on to follow the model of ‘access over ownership’. As of now, Ofo claims that the platform has around 70,000 bikes, which are used by almost 1.5 million users in 20 cities. What Ofo has done, have been started by many other brands as well, yet this funding will catapult it into a large sector of customers. From technological infrastructure to logistical expertise, Didi has it all, and there is no reason why a bike-sharing platform wouldn’t work in a country as populated as China. It only remains to be seen whether this will stay as an investment or if it will change into acquisition in the future.