Alibaba leads $866m round for China's Ofo
Chinese bike-sharing start-up Ofo has raised $866 million in a new funding round – comprising equity and debt – led by existing investor Alibaba Group. It is said to be the largest round raised by a bike-sharing company to date.
Other investors in the round include Alibaba’s financial services affiliate Ant Financial, Haofeng Group, Tianhe Capital, and Junli Capital. Alibaba also led Ofo’s $700 million Series E round in July of last year, less than a month after Tencent Holdings led a $600 million round for Mobike, Ofo's closest rival.
“As the global leader in the bike-sharing sector, Ofo has been transitioning from a phase of rapid growth to a new 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,” Wei Dai, Ofo’s co-founder and CEO, said in a statement.
The company launched on the campus of Peking University in 2015 as a student bike-sharing project. It claims to be the world’s first dock-less bike-sharing platform, connecting 10 million bikes with 200 million users in 250 cities across 20 countries. It records about 32 million transactions each day on its platform.
Ofo’s fundraising – over the course of more than two years – now amounts to more than $2 billion. Other investors in previous rounds include CITIC Private Equity, DST Global, Hony Capital, Matrix Partners, Atomico, Coatue Management, Macrolink Group, and Didi Chuxing.
Ofo and Mobike between them control over 90% of China’s bike-sharing market. Several smaller players have been forced out in the last 12 months, including Bluegogo, which ranked a distant third in terms of market share. Ride-hailing platform Didi Chuxining subsequently agreed to takeover Bluegogo’s business and integrate it under Didi’s own bike-sharing platform.
Ofo and Mobike are not profitable and the expectation is that they will ultimately merge. However, the two companies told local media that they are set on remaining independent, with plans to expand further into different geographies and providing new services.
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