China’s DiDi, Ant Financial said to consider joint $2b Ofo buyout

The logo of Chinese ride-hailing firm Didi Chuxing is seen at their new drivers center in Toluca, Mexico, April 23, 2018. REUTERS/Carlos Jasso

Chinese ride-hailing giant Didi Chuxing and Alibaba’s Ant Financial are in talks with bike-sharing startup Ofo for a joint buyout offer that could value Ofo at up to $2 billion, according to a source with direct knowledge of the discussions.

A deal would mark the latest stage of consolidation in China’s once-booming bike-sharing industry, where a series of startups have burned through hundreds of millions of dollars in the fight to dominate key cities, littering the streets with thousands of bikes in the process.

It would bring Alibaba-backed Ofo even deeper into the e-commerce giant‘s orbit, just months after Ofo rival Mobike was snapped up in a $2.7 billion deal by Meituan-Dianping, the on-demand online service provider with links to Tencent, a backer of Mobike.

Didi, which already owns a stake in Ofo, has hired a third-party agency to conduct due diligence on the startup’s business and finances, the source said. The offer may be lowered or even dropped if Ofo‘s business turns out to be worse than expected after the due diligence is completed, the source said.

Chinese local media first reported Didi and Ant teaming up to bid for Ofo.

Spokeswoman for Didi and Ant declined to comment. Ofo did not immediately respond to requests for comment.

Japanese telecoms and technology giant SoftBank Corp is a shareholder in all three companies.

Besides engaging in tight competition in China, Mobike and Ofo have aggressively expanded abroad, with Beijing-based Ofo saying on its website that it runs more than 10 million bikes in over 20 countries.

However, media reports in recent weeks have said the company has scaled back or shut down operations in markets such as Australia and India.

In March, Ofo said it raised $866 million in a new funding round led by Alibaba, which it described as the largest investment garnered in a single round by a bike-sharing startup.

Also Read:

China’s Didi Chuxing to take over struggling bike-sharing startup Ofo: Report

Chinese bike-sharing firm Ofo raises $866m in Alibaba-led round

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.