Hong Kong bike-sharing start-up Ketch’up sells stake for crypto coins, to get a tech lifeline from blockchain

Ketch’up Bike, the smallest among five of Hong Kong’s bicycle-sharing services, has sold a majority stake in its seven-month-old operation for cryptocurrency coins, as it seeks a technological lifeline to reinvent its business while the remainder of the cash-burning industry goes through a shake-up.

The company, which operates 1,000 bicycles around Sha Tin in the New Territories, said it has sold a 60 per cent stake valued at about US$1 million to a unit of South Korean blockchain company JNU for unspecified units of two coins called JPAY and CyClean.

The transaction would marry two newfangled concepts: the mobile internet-enabled sharing economy with blockchain’s distributed ledgers, which could offer a technological“breakthrough” out of the growth quagmire besetting the bike-sharing business that no fiat currency could address, said Ketch’up co-founder and chief executive officer Kenneth Chau.

“The biggest challenge faced by bike-sharing start-ups is the manpower required to manage the bicycles that are leased out,” said Chau, who holds 40 per cent of Ketch’up after the deal with three other shareholders. “By using blockchain, every rental transaction will be recorded on the distributed ledger, including the customer’s payment track record, and the number of miles that he has travelled.”

JNU, founded in South Korea in 2015, has transformed into a blockchain company from a maker of video security recorders. Aside from CyClean, founded by JNU group chairman David Young, JNU is today focused on building a blockchain-based payment network using its JPAY cryptocurrency. It has branches in Shenzhen and Harbin, which until recently were distributing health products for the JNU group but has recently turned to developing a blockchain business.

Both of the coins will be traded exclusively starting August 1 on KocoStock, or the South Korean Coin Stock for cryptocurrency coins, which is also owned by JNU.