Ofo Raises Over $700M Led by Alibaba

On Thursday, Ofo, a leading Chinese bike-sharing firm, announced that it has raised more than $700 million in a funding round that included Jack Ma’s Alibaba Group and two others, it is the largest funding so far in the rapidly growing industry.

The Beijing-based Ofo said that aside from Alibaba, the series E funding was also led by Hony Capital and CITIC Private Equity, with additional investment from current investors Didi Chuxing and DST Global.

“We will further upgrade our service for  better user experiences, accelerate our global expansion strategy and continue to lead the bike-sharing industry,” said Dai Wei, founder and CEO of Ofo, in a prepared statement.

“Our vision is to unlock every corner of the world, and make Ofo the universal language.”

Dai Wei had also said in April the firm was valued at upwards of $2 billion.

The round overtook the $600 million round funding by Mobile last month led by internet giant Tencent Holdings, its largest financing round to date and joined by Sequoia, TPG and Hillhouse Capital among others.

Ofo and rival Mobike are the two biggest Chinese companies offering bike-sharing services at home and abroad, attracting large amounts of venture investments. 

China’s bike-sharing industry has been sprawling, aiming to improve urban mobility in the country and promote greener support.

Ofo, founded in 2015, shot to success with its innovative business model, providing non-docking public bikes. The concept is simple enough: people use smartphone app to unlock a nearby bike and ride to their final destination for a small fee, beating the congested traffic in many Chinese cities.

The bike-sharing startup is currently targeting an expansion to 20 million bikes in 20 countries by the end of 2017.

China’s bike-sharing market has become a popular investment opportunity. Investors have seen the potential in the market and have poured sizable chunks of money into the segment.

The company said it now has 6.5 million shared bikes in 150 cities across five countries and regions, handling and average 25 million rides a day.

Alibaba, making the investment after its associate Ant Financial participated in the previous round, said Ofo redefining short-distance commute with low-carbon footprint offering.

Alibaba executive Vice Chairman, Joe Tsai, said, “Ofo is the industry leader and we support its open platform strategy.”

As of the first quarter of 2017, Ofo accounted for 51.9% of the Chinese bike-sharing market, while Mobike held about 40.7%, according to an industry report.

Both companies are aiming to expand overseas and researching the use of Internet-of-Things for future mobility services.

Among the markets that Chinese bike-sharing firms have already entered are Britain, Singapore, and the United States.

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