China’s bike rental giant, Ofo announced it raised $866 million investment led by Alibaba Group, with additional partners in Haofeng Group, Tianhe Capital, Ant Financial and Junli Capital. The company is using a combination of debt and equity financing for this round of investment. A statement from the company claimed that this new funding represents a record in the bike-sharing industry.
Earlier this month, rumors spread in China reporting Ofo held $280 million funding from Alibaba through chattel mortgage. However, we got no information concerning a relation between the two occurring news reports.
“As the global leader in the bike-sharing sector, Ofo has been transitioning from a phase of rapid growth to a stage of high-quality development. Ofo will continue to put our customers first and lead the bike-sharing industry with technological innovation and efficient operations,” said Ofo CEO and co-founder, Dai Wei.
The funding round cannot come at a better time for Ofo who were desperately looking for cash. Being a main player in the Chinese bike rental industry, Ofo usually attracted investors like moths to light since its inception. However, their fundraising pace reached a stand still since last July after raising $700 million Series E funding. The lack of cash in-flow since then was stressful for the company as they are caught up in a cash spilling completion with Mobike.
Ofo is a station-free bike sharing firm with the motto “Grab a bike anywhere. Park a bike anywhere.” It operates in more than 250 cities and are present in 21 countries, including India. They have a widespread user-base with over 200 million users globally and six billion well-organized, convenient and pollution-free rides, accumulating to 32 million rides daily. Ofo’s service is beneficial to the urban environment for it reduces traffic congestion, it also saves renewable and non-renewable energy and promotes a healthy lifestyle and method of transport.