New money re­ju­ve­nates Ofo bikes

China Daily (Hong Kong) - - FRONT PAGE - By OUYANG SHIJIA ouyang­shi­jia@ chi­nadaily.com.cn

Chi­nese bike-shar­ing com­pany Ofo Inc said on Thurs­day it has raised more than $700 mil­lion in a fresh round of fi­nanc­ing to ex­pand glob­ally, as its faces ris­ing com­pe­ti­tion from do­mes­tic ri­vals, chiefly Mobike Tech­nol­ogy Co Ltd.

The new se­ries E round of fi­nanc­ing was led by Chi­nese e-com­merce gi­ant Alibaba Group Hold­ing Ltd, Hony Cap­i­tal and Citic Pri­vate Eq­uity, the com­pany said in a state­ment. Other back­ers in­clude its for­mer in­vestors DST Global and ride-hail­ing gi­ant Didi Chux­ing.

It is the big­gest round of fi­nanc­ing in the bike-shar­ing in­dus­try to date, sur­pass­ing Mobike’s lat­est over $600 mil­lion round last month. Bei­jing-based Ofo had re­port­edly sought the new fund­ing at a val­u­a­tion of about $3 bil­lion, which will help it more than triple its yel­low bikes to 20 mil­lion in 200 cities glob­ally by the end of this year.

“We will fur­ther up­grade our ser­vice to en­sure a bet­ter user ex­pe­ri­ence and ac­cel­er­ate our global ex­pan­sion strat­egy,” Ofo founder and CEO Dai Wei said in a state­ment.

Key in­vestor Alibaba said it will work closely with Ofo to fur­ther de­velop the emerg­ing bike-shar­ing in­dus­try.

“Ofo has re­de­fined short­dis­tance com­mut­ing, en­abling a low-car­bon foot­print ex­pe­ri­ence and de­liv­er­ing value to users and so­ci­ety. It is the in­dus­try leader and we will sup­port its open plat­form strat­egy,” said Joe Tsai, ex­ec­u­tive vice chair­man of Alibaba Group Hold­ing Ltd.

Be­fore the lat­est in­jec­tion, Ofo, which has op­er­a­tions in more than 150 cities in five coun­tries glob­ally, had raised more than $650 mil­lion, claim­ing it had ob­tained an es­ti­mated val­u­a­tion of around $2 bil­lion.

Bike shar­ing is a craze sweep­ing across ma­jor cities in China, mak­ing pedal power cool again. In a move to stay ahead of the field, bike­shar­ing com­pa­nies are seek­ing large amounts of fund­ing to ex­pand in both the do­mes­tic and over­seas mar­ket.

Op­er­at­ing more than 6.5 mil­lion bikes, Ofo said it has over 100 mil­lion users and has sup­ported more than 2 bil­lion rides since its de­but in 2015. Its top com­peti­tor Mobike, backed by in­ter­net gi­ant Ten­cent Hold­ings Ltd, has placed more than 5 mil­lion bikes in over 130 cities glob­ally, in­clud­ing Manch­ester, Eng­land, and Fukuoka in Ja­pan.

Mobike CEO Wang Xiaofeng said in a state­ment last month the com­pany would gear up its global ex­pan­sion, aim­ing to op­er­ate in 200 cities by the end of 2017.

Wang Chenxi, an­a­lyst at in­ter­net con­sul­tancy Analysys in Bei­jing, said with the sup­port of sus­tained fund­ing by in­vestors, bike-shar­ing com­pa­nies are able to ex­pand their fleets and of­fer bet­ter prod­ucts and ser­vices.

“With the new fund­ing, Ofo will ac­cel­er­ate its pace of global ex­pan­sion in the next half of the year,” she added.

WANG WEIWEI / FOR CHINA DAILY

A worker as­sem­bles an Ofo bike at a plant in Tian­jin.

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