Chinese bike rental unicorn Ofo closes Series D+ from Ant Financial

Visual from ofo website

Bike-rental startup ofo has closed a strategic investment in the form of a Series D+ investment from Ant Financial, the financial services arm of the Alibaba Group.

Financial terms of the transaction are undisclosed.  

The investment will see ofo cooperate with Ant Financial in the fields of e-payment, credit system and its international growth and follows an earlier partnership formed with Ant Financial-backed social credit scoring system Sesame Credit, which allows Shanghai-based ofo users with a Sesame Credit score of 650 or higher to register on the app without making the RMB 99 deposit.

This strategic investment by Ant Financial follows an earlier strategic investment from Chinese transport service major Didi Chuxing.

Eric Jing, CEO of Ant Financial, said, “Ant Financial’s vision is to make our world slight better each day. The vision is shared by bike sharing companies like ofo,” said  “Ant Financial hopes to make our mobile platform, personal credit score, payment and risk management systems available to help the whole bike sharing industry grow better.”

The most recent investment that ofo raised was a $450 million Series D in February. This was claimed by ofo to be the largest funding round to date among bike sharing services. CEO and founder Dai Wei has disclosed that ofo is valued at $ 2 billion and sees over RMB 10 million ($1.45 million) in daily revenue. The company hopes to be profitable this year. 

According to Ant Financial CEO Jing Xiandong, the partnership with ofo will allow it to harness the potential of its mobile platform, which offers services that include credit management, online payment, risk management and safety control.

Meanwhile, ofo’s competitor Mobike has formed a similar partnership with WeChat. Together, AliPay and WeChat dominate China’s online payments space. In Q4 2016, Alipay was reported to hold 55 per cent of the third-party mobile payment service market, while WeChat’s own suite of payment services which includes Wechat Payment and QQ Wallet, has 37 per cent market share. Two years ago, Two years ago, WeChat’s payment services held only 10 per cent of the market while Alipay held 80 per cent of it.

Via the investment, Ant Financial will be able to expand its user base internationally, leveraging on ofo’s ambitions to become a global player. The Beijing-based bike sharing service currently operates in the UK, US and Singapore, with plans to expand to 20 countries by the end of 2017. These include Japan, Spain, France, Germany and the Philippines. 

This gels with the strategic focus of Ant Financial to enter and establish a footprint in emerging markets such as India and South America, given that mobile payment penetration in these emerging markets is still low.

The partnership comes at a time when the market for bike-sharing services in China is saturated. In an interaction with Bloomberg, ofo’s co-founder Zhang Siding maintained that despite teh saturation, ofo had the scale to survive any bust in the sector.

He said, “There will be a bubble for the industry. But as long as we continue to do practical things, then there won’t be a bubble.”

Also Read:

China: Bike sharing service Youon considering $86.7m IPO

Ex-Uber exec Michelle Chen moves to Chinese bike sharing firm Ofo

China’s bike sharing battle intensifies; Hellobike joins the fray with GGV Capital-backing

China: Ubike joins bike-sharing biz bandwagon, raises $22m

HK: Gobee.bike raises funding from Swiss Founders Fund, others

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. 
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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.