Bike-sharer Ofo raises new cash for global growth
July 6, 2017
Amid plans to deploy 20 million bikes and expand its services to 200 cities worldwide by the end of 2017, Chinese bike-sharing start-up Ofo said on Tuesday it has raised more than $700 million (617 million euros) in additional funding.
The latest funding round was led by New York Stock Exchange-listed e-commerce firm Alibaba Group among others.
Two of Ofo's existing investors, Chinese ride-sharing start up Didi Chuxing and the Hong Kong-based investor DST Global, put in additional funds.
Ofo, along with its major Chinese competitor Mobike, seeks to dominate the global bike-sharing sector. Between them they operate in hundreds of Chinese and other Asian cities and have aggressive expansion plans in the West.
Recently, Ofo tested its services in the small English city of Cambridge, as well as Silicon Valley and San Diego.
The company’s founder and CEO, Dai Wei, has previously said that Ofo would target Germany, France, Spain, Japan and the Philippines.
Fast-growing sector
But some analysts say the cheap so-called "last mile" rides that bike-sharing apps offer - referring to the fact that many users will rent a bike for the first or last mile of their commute - won't make for a sustainable business model.
The two firms - and several much smaller players - also face tighter regulation in Chinese cities after residents complained about the accumulation of millions of rentable two-wheelers on the city streets.
Chinese state media reported late Wednesday that from October 1, firms will be forced to hire at least one maintenance worker for every 200 bicycles.
Market flooded
The Xinhua news agency said more than 30 operators had deployed more than 10 million branded bikes over the past year alone, and that many of them were badly maintained or parked haphazardly.
Ofo's new financial round follows a similar new $600 million investment to Mobike last month, its largest to date.
The Beijing-headquartered firm says it currently "has connected over 6.5 million bikes to riders in 150 cities across five countries, generating more than 25 million transactions daily."
In April, Ofo said the firm was valued at upwards of $2 billion.
mm (Reuters, AFP, Bloomberg)