China bike-sharing player Hellobike pursues US IPO

The company raised a Series G round of $233 million as recently as March. A subsidiary of CATL, a domestic battery maker, committed RMB500 million ($77 million), according to the prospectus. CATL is described as a strategic partner. It manufactures batteries used in Hellobike's vehicles and runs a network of battery swapping stations with the company and Ant Group.

Bike-sharing was hailed as a Chinese mobile internet innovation pre-2018 with the rise of app-enabled services offered by the likes of Ofo and Mobike. However, the high-cash-burn business model was soon called into question. Ofo ended up going bankrupt, while Mobike was acquired by Meituan, generating a handsome return for VC investors but leaving the buyer with heavy liabilities.

Launched in 2016, Hellobike was a latecomer to the industry, but it is now China's sole independent bike-sharing business of scale. Its longevity is in part due to a focus on lower-tier cities.

IReseach Consulting ranks the company as the largest shared-bike service provider in China and the world by the number of rides. It facilitated 5.1 billion bike and e-bike rides in 2020 and has over 10 million machines in service. Fees charged to users - for single rides, based on time spent on the bike with a minimum charge, or through subscription services - account for 91% of revenue.

Hellobike provides a range of complementary services, much like Meituan leverages the Mobike user base to bring traffic to its other businesses. Besides bike-sharing, the company provides a carpooling marketplace and e-scooters, while an in-store services marketplace, ride-hailing, hotel reservations, mobile grocery stores, and online advertising services are being piloted.

Hellobike's carpooling marketplace is China’s second-largest by gross transaction volume (GTV), according to iResearch. In 2020, it facilitated GTV of RMB7 billion through 94.5 million rides, representing a market share of 39% and 30%, respectively.

E-scooters is another significant area of expansion. Last year, the company moved beyond the shared economy to start manufacturing e-scooters under the Hello brand. This is supplemented by the battery swapping service launched with CATL and Ant Group. It serves e-bike sharing and e-scooter users.

Hellobike believes it is gaining traction with an ambition to build a self-sustaining service ecosystem. Last year, existing users of Hellobike represented more than 60% of new e-scooter service users and around 40% of new private car owners and riders in the carpooling marketplace. Conversely, first-time users of other services represented 8.4% of new bike users.

The company generating revenue of RMB6 billion in 2020, up from RMB4.8 billion in 2019 and RMB2.1 billion in 2019. Over the same period, its net loss has narrowed from RMB2.2 billion to RMB1.5 billion to RMB1.1 billion.

Ant Group and GGV are the largest external shareholders with 36.3% and 6.1%, respectively. 

Ant Group became the largest overall shareholder in 2018 when it led a RMB2.1 billion investment in Youon Bike, the listed parent of Hellobike. This came six months after it participated in a $350 million investment in the company. Two months before that, Hellobike merged with Youon Bike, which was already listed on the Shanghai Stock Exchange.

 

GGV first invested in Hellobike via a Series A round in November 2016. Grains Valley Capital, Joy Capital, and Bertelsmann Asia Investments also participated. Three months later, it led a Series A extension. Chengwei Capital led a Series B in 2017 and then WM Motor made a strategic investment the following year. Gaorong Capital is also a Hellbike backer.

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• Topics
• Greater China
• IPO
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• China
• Ant Financial
• GGV Capital
• Transportation
• TMT