New strategic investors include Ctrip, TPG Capital, and Huazhu Hotels Group
Hillhouse Capital and Sequoia China among existing investors participating in this round
Beijing Mobike Technology Co Ltd (Mobike), the world’s first and largest smart bike-sharing company, is all set to expand aggressively in China and internationally, after it closed its US$215 million Series D financing found.
The latest round of funding came just three months after the company closed its Series C financing round -- reportedly at about US$100 million.
The Series D round is led by strategic investors Chinese Internet giant Tencent Group and private equity firm Warburg Pincus. The recent round also saw the entrant of China's largest travel company Ctrip, private equity firm TPG, and China's top hotel operator Huazhu Hotels Group. They join a number of existing investors including Sequoia China, Hillhouse Capital.
According to the company's co-founder and CEO Davis Wang, the new round of financing makes Mobike the best funded company in its industry globally and it will also put Mobike one step closer to achieving its mission.
"Our mission is to bring more bikes to more cities, using our innovative technology to make cycling the most convenient and environmentally-friendly transportation choice for urban travellers. I’m delighted that our investors, which include some of the world’s best known companies, share our vision for improving urban living, and also share our confidence in the massive potential of our platform," said Wang in a media statement.
In an email reply to Digital News Asia, a Mobike spokesperson revealed that the company will be launching its services in Singapore over the next few months, and will also be looking at expanding into Europe.
"We are preparing to launch our service in Singapore in Q1 2017, and we are actively exploring opportunities to expand into other cities in Asia and Europe," said the spokesperson.
How Mobike works?
Mobike began trial operations in Shanghai at the end of 2015, and officially launched in Shanghai in April 2016. Within nine months, the company has expanded to nine cities across China. These cities include Beijing, Guangzhou, Shenzhen, Chengdu, Ningbo, Foshan, Xiamen, and Wuhan.
The specially designed Mobikes are equipped with GPS and proprietary smart-lock technology. This enables users to easily find a bike nearby anytime, anywhere using the Mobike smartphone app, and to unlock the bike using their phone. After reaching their destination, the user parks the bike at a suitable spot along the roadside and returns it by simply closing the lock, making the bike immediately available to other users nearby. Payment is automatically calculated and deducted from the user’s Mobike account.
Today, it has hundreds of thousands of bikes in operations. In fact, in Shanghai alone, it has over 100,000 bikes.
Fierce competition landscape
While it seems to be the most well-funded bike-sharing company and the largest smart bike-sharing company in China, it is certainly not alone in this space.
Over the past few months, many of its rivals have successfully raised funds to grab a piece of the pie. These companies believe that more people will start to ride bikes to work, or to travel a short distance, as it is seen as a more environmental-friendly mode of transportation as it does not produce pollution like cars do.
In China alone, there are at least three other companies competing with Mobike.
First is Beijing Bikelock Technology Co, which operates a cycle-sharing startup known as oFo, which is perceived as one of Mobike's top rival. It secured about US$100 million in funding in September 2016 from investors including the venture fundbacked by Lei Jun (the founder of Xiaomi Corp), and China's ride-hailing giant Didi Chuxing. According to a report by Bloomberg, the funding is said to have valued the startup at US$500 million.
Then, there's YouBai, a Shanghai-based bicycle rental platform. In December last year, it had raised some 100 million yuan (US$14.5 million) in its third round financing led by Black Hole Capital. It also raised 150 million yuan (US$21.8 million) from several domestic investors and local state-owned enterprises in September last year.
There's also Bluegogo, a bike-sharing application company backed by bike maker SpeedX. It was reported that SpeedX raised 150 million yuan in a round of funding, and part of the money will be invested on Bluegogo.
What else is next for Mobike?
Besides eyeing on South East Asia and Europe, the company is also looking at strengthening its presence in China.
"Mobike has the most sophisticated smart bike-sharing technology globally, and we look forward to bringing bikes to more cities around the world in the months ahead as we ramp up our expansion into more cities in China and internationally," said Wang (pic above).
According to a Mobike spokesperson, the company will be targeting more tier 2 cities in China.
"We are now active in 9 cities across China, including all of the Tier 1 cities and many of the largest Tier 2 cities. We have hundreds of thousands of bikes in operation – in Shanghai alone we now have well over 100,000 bikes.
"In the very near term we expect to launch in a number of other Tier 2 cities in China," said the spokesperson.
"We will consider expanding into any city where our smart bike solution can address local transportation needs. We believe the vast majority of urban residents would embrace a quick, convenient and environmentally friendly option like Mobike for short trips of two or three kilometers."
When asked if it will be launching its services in Malaysia and Indonesia, the spokesperson replied: "We can't comment on specific markets but we are actively exploring opportunities around the world."
With the bike-sharing industry having a very bright prospect ahead - estimated to grow by 20% annually and to worth over 5.3 billion euroes by 2020 (research by Roland Berger), one can safely expect the competition will get more intense in years to come.
Go-Jek's US$550 mil funding a game-changer for Indonesia
China's angels swooping down on Indonesia's startup space
Unicorns: Not quite mythical, but a rarity in South-East Asia
For more technology news and the latest updates, follow us on Twitter, LinkedIn or Like us on Facebook.