Warburg Pincus, Tencent lead $215m round for China's Mobike

Tencent and Warburg Pincus led Mobike's Series C round - said to be worth more than $100 million - in October of last year, alongside Hillhouse Capital. Hillhouse and Sequoia are among a number of investors to re-up in the latest round, where they are joined by new backers including TPG Capital, travel booking platform Ctrip, and Huazhu Hotels Group.

Mobike was co-founded by former executives at Uber China and Ford Motor Company in January 2015. By the end of that year trial operations were underway in Shanghai and the service officially launched in the city in April 2016. The company has since expanded into eight other cities, including Beijing, Guangzhou, Shenzhen and Chengdu. Mobike operates about 30,000 bicycles in total, which are manufactured by the company in order to lower maintenance and repair costs.

Bicycles are equipped with GPS and smart locks; a user identifies and reserves a vehicle through a mobile app and has a 15-minute window to unlocks it with their smart phone. After reaching their destination, the user parks the bike by the roadside and locks it, making the vehicle available for others. The service costs RMB1 per half hour, and payments can be transacted through Alibaba Group's Alipay system and Tencent's WeChat.

The concept is becoming as popular with investors as ride-sharing before it. Rival service Ofo - which started out as a student project at Peking University in 2014, established services on student campuses in over 20 cities, and is now targeting the wider market - received a $130 million Series C round last October, with ride-hailing platform Didi Chuxing leading one of two tranches. Ubike has also attracted private markets investors.

Bike-sharing schemes entered Western markets as government-backed urban development initiatives and China has seen similar activity: the Hangzhou program is the largest globally, with 66,500 bicycles for hire. However, state-run systems are said to be inefficient and the bicycles often unreliable. This and increasing smart phone penetration have created an opening for start-ups, although it remains to be seen whether these businesses can achieve scale and profitability.

"In terms of its resources, product and platform, and operational ability, Mobike is already far ahead of other players in the bike-sharing market. Its rapid expansion into more cities over the last few months has clearly demonstrated the fundamental strength and scalability of Mobike's model," Frank Wei, co-head of China at Warburg Pincus, said in a statement.

Other investors in Mobike from earlier rounds include Qiming Venture Partners, Bertelsmann Asia Investments, Joy Capital, Panda Capital, Vertex Ventures China, and Sinovation Ventures. It is not known whether they re-upped for the Series D. China Renaissance was Mobike's exclusive financial advisor on the transaction.

Warburg Pincus recently closed its dedicated China fund at the hard cap of $2 billion after about six months in the market. It will invest alongside the firm's $13.4 billion global flagship vehicle in China deals.

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• Topics
• Greater China
• Technology
• Expansion
• China
• Warburg Pincus Asia
• Tencent
• TPG Capital
• Hillhouse Capital Management
• Growth capital
• TMT
• Transportation