Ant Financial invests in VC-backed bike-sharing service Ofo

The two companies said they would collaborate on payment services, particularly as Ofo expands internationally. It claims to be the world’s largest bicycle-sharing platform, with more than 3.5 million bicycles across 81 cities in China, Singapore, the UK and the US. Ant Financial is also trying to enter overseas markets, establishing partnerships with Paytm in India and Ascend Money in Thailand. It has also launched a bid for North America-focused MoneyGram.

Ofo and Ant Financial have a working relationship, with the former using the latter’s credit scoring service – known as Sesame Credit – to offer customers deposit-free services. In most cases, users are required to pay a deposit before using Ofo’s bikes, for which they are charged RMB1 per 30 minutes. Alipay is already compatible with Ofo, but a deeper partnership with Ant Financial implies greater integration.

“Ant Financial hopes that, through working with Ofo, we can establish a model for the bicycle-sharing industry, opening up our mobile platform, credit and payment systems, and security capabilities to help the industry develop in an orderly manner,” said Jingxiang Dong, CEO of Ant Financial, in a statement. “We also want to promote lifestyle changes, a cashless society, and low-carbon travel.”

The investment also aligns Ofo with Alibaba while its direct competitor, Mobike, counts Tencent Holdings as an investor. Tencent’s WeChat messaging app works with both Ofo and Mobike – users unlock bikes by scanning a QR code – but Mobike said last month it was extending its partnership with the internet giant.

Ofo launched on the campus of Peking University as part of a student bike-sharing project in 2015, while Mobike launched a year later in Shanghai under the guidance of former executives at Uber China and Ford Motor. The companies’ Series C and D rounds – as well as various strategic investments – have been announced within weeks or even days of each other.

Ofo received Series A funding from GSR Ventures, ZhenFund, Beijing Dongfang Hongdao Asset Management and angel investor Gang Wang across two tranches in February 2016. A few months later, Matrix China led a Series B round. In October of last year, Ofo raised a $130 million Series C round, with Didi Chuxing, Coatue Management, Xiaomi and Shunwei Capital Partners among the investors. The Series D round, announced at the end of February, was led by DST Global.

Mobike’s $215 million Series D – announced in January – was led by Tencent and Warburg Pincus. In the weeks that followed, the company received strategic investments from Foxconn Technology Group and Singapore’s Temasek Holdings, respectively.

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• Topics
• Greater China
• Expansion
• Technology
• China
• Alibaba Group
• Growth capital
• Venture
• TMT
• Transportation