As with the car sharing segment, China’s bike sharers aren’t in the game to make money, but to grab market share. Chinese cities are awash with colourful two-wheelers right now with dockless bike-sharing the norm from providers such as Bluegogo, Ofo and Mobike (though in some cases consumers aren’t entering into the proper sharing spirit).
As with shared cars, the money is simply pouring in. Ofo has picked up more than $1.2 billion in funding, while Mobike has snagged some $900 million, with Bluegogo lagging some ways behind both, according to figures from Crunchbase.
Ofo is believed to be in talks to raise $1 billion in a round led by Japan’s Softbank, with Didi Chuxing, China’ s biggest ride-hailing outfit, also in the frame to pump in yet more finance. A deal might take Ofo’s valuation up to $3 billion.
However, it’s not clear what that number actually means.
“The high valuation stands on fragile ground, since the Chinese bike-sharing start-up is not making money and still plans to prioritise expansion over profit-making,” Crunchbase points out.
And more successful fundraising by Ofo could see Mobile follow suit.
“Those investors will answer with more capital,”Crunchbase believes. “And if they do, the bubble talk will continue until the market proves itself, or the companies in question hit a bump in the road and begin to deflate.”
Either way, expansion is continuing apace. Ofo is making like Uber, saying that it’s aiming to deploy 20 million bikes and expand its service to 200 cities in 20 countries by end-2017. It reports that it is currently generating more than 25 million transactions a day.
Ofo already operates in the UK in Cambridge, while Mobike rolled out in Manchester earlier this summer.