Venture capital firms develop sweet spot for Chinese bike-sharing firms

Venture capitalists seem to have developed a sweet spot for China’s nascent bike-sharing market, with four Chinese startups raising funding of between 10 million yuan (HK$11.6 million) and US$100 million in September.

Much of the investment optimism in the sector stems from the huge untapped potential in the ‘last kilometre short trip’ market. With the country embarking on a massive urbanisation programme, travel demands for working professionals, especially the short distances between home and railway, bus stations is set to grow rapidly.

That the market is ripe for organised players is evident from the millions of unlicensed electric vehicles, which already offer these services in several Chinese cities.

Cronus, a bike maker listed on China’s new third board, is one of the bigger players that has taken a fancy for bike sharing. Deng Yonghao, the company’s chairman, said on Sunday that it would invest 100 million yuan to set up XiaoMing Danche, a bike-sharing application, according to tech website leiphone.com.

A fortnight ago, Chinese bike-share startups Mobike and oFo had separately raised large investments for further expansion. On September 30, Mobike said it got US$100 million as Series C financing from investment companies like Sequoia Capital and Hillhouse Capital, according to Tencent Tech.

On September 26, China’s ride-sharing giant Didi Chuxing said it has invested tens of millions of US dollars in ofo, China’s largest bike-sharing platform, as part of a multi-layered partnership between the two parties in the urban mobility sector.