‘Uber for bikes’ Mobike raises over $600m led by Tencent

FILE PHOTO: A Mobike sign is seen in Guangzhou, Guangdong Province, China, October 8, 2016. REUTERS/Stringer/File Photo

Shanghai-based Mobike, which claims to be the largest smart bike-sharing company globally, on Friday said it had raised over $600 million in a new round of financing led by existing investor Tencent. This Series E round reportedly values the company at more than $3 billion.

According to Mobike, its Series E funding marks the biggest ever financing round in the bike-sharing industry globally.

Mobike’s closest competitor – Beijing-based Ofo – is also reported to be raising around $500 million at a $3 billion valuation, implying that the two biggest bike rental companies in China will collectively raise a billion in fresh financing deals.

Other investors who joined the latest investment in Mobike include Sequoia, TPG, and Hillhouse Capital. New investors BOCOM International, ICBC International, and global institutional asset management firm Farallon Capital also participated, it added.

It is not known if Singapore state fund Temasek Holdings, which is among Mobike’s investors, participated in the latest round. Other investors include Warburg Pincus, Ctrip and Chinese hotel operator Huazhu Hotels Group.

Davis Wang, CEO and Co-founder of Mobike, said: “Mobike is the global leader in smart bike-sharing and through our relentless commitment to innovation we offer the world’s most advanced and user-friendly bike-sharing platform. We are pleased to secure the continued support of leading investors who share our vision for the transformative potential of the Mobike platform. Our platform is already revolutionizing how people move in cities around the world; transforming the urban transportation landscape.

The company, in a statement, pointed out that within the first six months of calendar year 2017, it had expanded to 100 cities, beating its target for the whole year. This period also saw it entering into strategic partnerships with companies such as Foxconn, Dow Chemical, Hanergy and China Recycling Development in areas such as supply chain management, new material R&D, mobile renewable energy and product lifecycle management, among others, it said.

Mobike further added that it was rolling out a global IoT network in partnership with leading telecom and IoT companies such as Qualcomm, Ericsson, Vodafone, China Mobile, and Huawei, establishing a strong foundation for its accelerating global expansion.

Just last week, the company had made a global splash, with the launch of its ‘dockless’ bike sharing scheme in Manchester, UK with an initial 1,000 bikes. Prior to that, it had expanded to Singapore in March.

“With the continuing support of our investors, we have three clear targets for the coming months. Firstly, we will accelerate the pace of global expansion, and our new target is to be in 200 cities by the end of this year. Secondly, we will increase investment in R&D of our IoT network and new technologies; working closely with our global-leading technology partners. And thirdly, we will invest in building a superior technology infrastructure to support our innovations in the field of AI and intelligent hardware, which will further bolster our competitive advantage and enable us to offer the best possible experience to Mobike users globally,” Wang said.

Ofo, too, boasts of an impressive set of investors including Didi Chuxing, CITIC Private Equity, Coatue Management, Xiaomi Inc., London-based technology investment company Atomico and China’s Macrolink Group.

Even as several industry experts and market watchers have raised concerns on the valuations of bike sharing startups in China, Mobike pointed out that Tencent, the lead investor in this round, had first invested in it in October 2016, and had led the Series D round in January 2017. Mobike also added that Tencent’s participation underlined the bike-sharing company’s business model and was also a recognition of its growth trajectory.

Pony Ma, Chairman and Chief Executive Officer of Tencent, said: “At Tencent we have great admiration for Mobike’s vision, and we are very optimistic about its future prospects. Over the past year, Mobike has achieved incredible growth. We will continue to offer our core resources and all the support we can – including through our very successful WeChat partnership – to continuously empower Mobike’s growth, innovation and expansion.”

In February 2017, Mobike became one of the first companies to launch a mini-app on Tencent’s WeChat social messaging app, and the partnership allows users to scan and unlock a Mobike without leaving the WeChat app. Besides, Mobike is now also integrated as one of the key functions in WeChat’s massively popular WePay Wallet feature, it said, while adding that the this ‘frictionless access to WeChat’s more than 900 million monthly active users has driven the rapid increase in the pace of new user acquisition.

Neil Shen, Founding and Managing Partner of Sequoia Capital China, said: “Over the past 12 months, Mobike impressed us by its high speed development and remarkable innovation capability. Meanwhile Mobike has achieved dominant market place with competitive advantages. Sequoia Capital China has confidence in the long-term development and global expansion of Mobike and hope we could help Mobike go global as a model of ‘China Innovation’.”

Both Mobike and Ofo bikes are equipped with a GPS-enabled smart lock, which connects the bike to their respective IoT network, enabling the company to monitor the health and location of the bike at all times. In May, Mobike launched its “Mobike+” open platform strategy, which enables other companies to integrate their products and services with its platform and leverage its Big Data insights, and benefit from its massive IoT network. Partners who have signed up for this include China Unicom, China Merchants Bank, UnionPay, Baidu Maps and JD.com.

Also Read: Mobike secures strategic investment from Temasek Holdings & Hillhouse capital

Chinese bike-sharing firm Ofo raises $450m in latest funding round