Chinese bike-rental startup Ofo is seeking to raise $500 million, as per a report by Bloomberg. Quoting people familiar with the development, the article highlights that the company is targeting a valuation of $3 billion. This news comes just months after it secured $450 million from Didi Chuxing Jack Ma’s Ant Financial, DST Global and other investors.
Ofo is supposed to have at least $650 million in its coffers and is said to have an estimated valuation of about $2 billion. Now, the company is planning to expand to 20 countries and about 200 cities this year.
Startups in China are taking up their games a notch higher to be the “Didi for bikes” in China. Their models are pretty simple and the service is rather easy to avail. People looking for a ride have to open their smartphones, unlock a bike parked nearby, ride it to their destinations and pay once they reach.
IOfo’s is backed by Ant Financial, an affiliate of e-commerce giant Alibaba Group Holding while its competitor Mobike is backed by Tencent, the operator of WeChat. The latter had raised $215 million this year in funding received by Tencent Holdings and Warburg Pincus LLC. It aims to expand to Europe and touch 200 cities globally this year.
Clearly, China’s leading internet firms have taken sides. They are eyeing the massive user data and mobile traffic generated by millions of daily rides, simultaneously fending off their immediate rivals. Ofo has linked its users to Ant’a Sesame Credit System, which lets users with scores above certain levels to use its bikes without giving in deposits. While, Tencent’s WeChat enables access to Mobikes through its Mini Programs platform. Hence, they do not need to download the app separately and pay via WeChat Pay.
With the unending rivalry in this industry, it would be interesting to see how things turn out in future after Ofo rakes in more funds.