Mobike secures strategic investment from Temasek Holdings & Hillhouse capital

Mobike rider in China. Credit: Mobike

Smart bike-sharing company Mobike has closed a new strategic investment from Temasek Holdings, Singapore’s state fund, and Hillhouse Capital, a leading global investment management firm based in Asia. Financial terms of the investment were undisclosed.

This follows the company’s successful conclusion of its Series D round earlier this year.

The equity investment from Temasek marks the first direct investment in Mobike by the Singaporean firm, after its subsidiary Vertex Ventures led Mobike’s Series B+ round in 2016.

Hillhouse Capital led Mobike’s Series C fundraising round in late 2016. Since the start of 2017, Mobike has raised more than $300 million. This comes at a time when Chinese bike-sharing startups are gearing up to compete for market share.

Speaking on the latest deal, Liang Zhou, Director at investment bank China Renaissance, which has served as the long-term exclusive financial advisor to Mobike, stated: “Investors are excited about Mobike’s pioneering business model, because they can see that Mobike has a clear and focused corporate vision, an innovative team, and a unique capacity to anticipate and quickly respond to the evolving needs of the urban transport sector.”

Davis Wang, co-founder and CEO of Mobike said, “In just 10 months, Mobike has grown to serving more than 10 million users across 21 cities – and in that time, people across China have taken more than 200 million Mobike rides. This equates to a reduction in carbon emissions of hundreds of thousands of tonnes.

Wang continues: “While we recently concluded a hugely successful Series D fundraising round that made Mobike the best-capitalised company in our industry, we are delighted to be able to  welcome Temasek as a strategic investor and to deepen our engagement with our long-term partner, Hillhouse Capital.”

Bike sharing statistics from Statista.

Credit: Statista

According to Wang, Mobike will use the investment proceeds to fund its technology, increase its production capacity, drive talent acquisitions and retention as well as promote international growth.

Mobike was officially launched in Shanghai in April 2016, and has rapidly expanded to 21 cities across China, including the country’s largest Tier 1 cities – Beijing, Shanghai, Guangzhou and Shenzhen. Mobike previously announced that it intended to launch in Singapore in Q1 2017.

The aim of the venture is to make cycling the most convenient and environmentally-friendly transport choice for urban residents. Mobike plans to work with city planners, businesses, and commuters to develop sustainable and smart transport solutions.

Hillhouse Capital’s new investment in Mobike follows its participation in the company’s Series C round in late 2016, which it jointly led with Warburg Pincus, and its participation in the recently concluded Series D round.

recent report on the bike-sharing industry by market research firm iResearch indicated that the first week of 2017 saw Mobike’s mobile app had 5.849 million Weekly Active Users (WAU), excluding users of the WeChat MicroApp. This is reportedly the highest in the industry in China and 4.2 times higher than its closest competitor.

On 23 January 2017, Mobike announced an exclusive strategic partnership with Foxconn, the world’s largest manufacturing technology services company. This focuses on enabling Mobike to increase annual global production capacity for its proprietary smart bikes to 10 million units and also saw Foxconn conduct a strategic investment in Mobike.

Currently, Foxconn is focusing on initiatives to enhance the design and user experience of Mobike’s smart bikes, in addition to optimising Mobike’s global supply chain.

Zhang Lei, Hillhouse Capital’s founder and CEO, said, “In all of our investments, we take a long-term partnership approach and we are pleased to deepen our partnership with Mobike. The Mobike team is leading the industry because they have a clear vision for the future of urban transport, and they are relentlessly focused on enhancing the Mobike platform and services to enable them to achieve this vision.”

He adds, “In particular, we believe that Mobike has huge potential for growth internationally, and we look forward to leveraging our global network and resources to help Mobike bring its innovative urban transportation solution to cities around the world.”

The transaction comes at a time when the Wall Street Journal reported that Chinese bike-sharing startup Ofo Bicycle is aiming to raise $150 million and build itself towards a valuation of $1 billion.

In a report by China Daily, as at the end of 2016, China’s bike-sharing monthly active users (MAU) had reached to 4.32 million, with Mobike achieved 72.5 per cent of the market share and accounting for more than 3.13 million MAU. This rapid growth is attributed to heavy continuous capital investments.

In a statement, the company explained: “As of last December, Mobike took the crown, followed by Ofo, Youon Bike and Black Bird Bike, to become the top four apps with highest MAU hit on the market,”

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