Alibaba has injected a total of Rmb1.77 billion ($280 million) in Chinese bicycle sharing firm Ofo in two separate deals carried out by its subsidiaries in February, according to a report by Chinese news site The Paper.
In early February, Shanghai Yunxin Venture Capital, a unit of Alibaba’s fintech arm Ant Financial, injected Rmb500 million ($80 million) into Ofo that pledged 4.45 million bikes in Beijing, Shenzhen, Shanghai, and Guangzhou in return.
On February 12, Ofo again entered into a mortgage agreement with Alibaba through Zheejiang Tmall Network. The bike-sharing firm received Rmb1.27 billion ($200 million) by mortgaging a certain amount of bicycles.
The report, however, noted that Ofo has not officially announced the new round of financing yet “because the major shareholder has not signed the agreement yet”.
Since last year, Ofo has been frequently reported to have received a new round of financing, worth about $1 billion. The financing, however, has not yet been officially confirmed.
If the Alibaba deal pushes through, the financing will solve the needs of the bike-sharing company, according to sources quoted by the report.
Beijing-based Ofo operates over 10 million yellow-coloured bicycles in 250 cities and 20 countries as of last year. It also claims to have over 62.7 million monthly active users.
The bike-sharing firm was earlier rumoured to be in merger talks with rival Mobike, which would have created the world’s biggest bike-sharing company. Mobike co-founder and CEO Davis Wang and Ofo founder and CEO Dai Wei, however, denied the possible merger.
Mobike and Ofo have been in a fierce struggle to gain control of the booming bike-sharing sector. Launched in Shanghai in April 2016, Mobike now operates in more than 170 cities around the world including China, the UK, Japan, Italy, Singapore, Thailand, and Malaysia.
Big names in venture capital and private equity, including Sequoia Capital and Hillhouse Capital, have reportedly invested over $2 billion into the two rival firms.
The competition, however, further heats up with the entry of new bike-sharing companies that are also reportedly cornering huge amount of investments, among them HelloBike.