Bike-sharing firm Ofo's dramatic fall from grace a warning to China's tech investors
- Ofo’s plight is a warning for China’s tech investors, who have ploughed billions of dollars into loss-making businesses such as bike sharing and ride hailing
On the sidewalks of Shanghai and Beijing, once bright-yellow Ofo bicycles lie in varying states of disrepair – chains unhooked, wheels buckled and paint starting to fade – reflecting the quick rise and sharp fall of the Chinese bike-sharing start-up.
Millions of Ofo users are clamouring for their deposits to be returned and the firm’s founder has admitted considering bankruptcy.
Ofo’s plight is a warning for China’s tech investors, who have ploughed tens of billions of dollars into loss-making businesses such as bike sharing, ride hailing and food delivery. Not long ago, Ofo was racing into markets overseas and raising billions from backers including Alibaba Group Holding Ltd and Didi Chuxing.
“It now appears bike sharing is the stupidest business, but the smartest brains of China all tried to get in,” Wu Shenghua, founder of now bankrupted bike-sharing company 3Vbike, told Reuters. “It really now seems ridiculous.”
Ofo was a phenomenon. Its dockless bicycles, which could be picked up by scanning a QR code and left anywhere, grew from Beijing campuses to become an icon of young, urban cool. The firm garnered a valuation of US$2 billion.