Chinese bike-rental startup has successfully managed to raise a series D+ funding from Alibaba’s financial affiliate Ant Financial. However, the financial details of the transaction remain undisclosed. This funding forms a part of a strategic partnership inked between the two firms. Together they will be seen collaborating in the fields of mobile payments, credit, and international expansion.
This is not the first time that two companies have come together. Last month ofo had partnered with Ant Financial for its credit system called Sesame Credit. It provided deposit-free bike rentals to customers in Shanghai with Sesame Credit scores of 650 and more. In April, the offering was also introduced in Hangzhou. The ones who do not fulfil the Sesame Credit’s requirements have to make a deposit of RMB99 (US$14) to begin using the service of renting bikes.
The announcement comes less than two months after the startup scored a US$450 million series D at a valuation of one billion. The round which was led by DST Global also included investors like Matrix China, CITIC, and Didi Chuxing. The round was touted to be the largest funding round in the industry.
Dai Wei, CEO and founder of ofo has been quoted saying that the bike-rental startup is now valued at $2 billion and earns over RMB 10 million ($1.45 million) in daily revenue. It is hoping to turn profitable this year. Jingxian Dong, CEO of Ant Financial, in a press release, mentioned,
Ant Financial hopes that through partnering with Ofo, we can open our mobile platform, credit system, payments, security capabilities, etc. as a model for the bike-sharing industry, and help the whole industry improve and develop in an orderly fashion.
ofo’s major rival Mobike had also inked a similar partnership with WeChat. Mobike’s bike rental service was added to WeChat wallet previous month. WeChat and Ant Financial-managed Alipay mainly dominate the online payments industry of China. Both the startups offering bike sharing services have been vigorously strategizing to add more funds to their coffers and put their best steps forward in markets beyond China. Mobike has received funding from the likes of Tencent, Temasek and tech manufacturing giant Foxconn.
Ant Financial will be able to leverage on ofo’s ambition to go global, bring more users to Alipay, in addition to the information on credit scores and user behavior.
Apart from China, ofo currently operates in the UK, U.S. and Singapore, and aims to expand to 20 countries by the end of 2017 including France, Germany, Japan, Spain, and the Philippines.