Alibaba confirms it is mulling further investment in bike-sharing start-up Hellobike
- Bike-sharing firm has processed 12 billion orders over the past two and a half years
Alibaba Group confirmed it was looking at contributing to a new round of fundraising by Shanghai-based bike sharing start-up Hellobike.
“We are considering this opportunity,” said an Alibaba spokeswoman, responding to an earlier Chinese media report saying that Alibaba planned to invest “hundreds of millions of US dollars” in Hellobike in the near future.
Alibaba declined to provide further details. A Hellobike spokeswoman declined to comment.
The three-year-old start-up already counts Alibaba’s financial arm Ant Financial, Primavera Capital, and GGV Capital among its backers.
Six months ago Hellobike announced it had raised more capital in a round of financing led by Ant Financial but declined to reveal the amount.
Alibaba is the parent company of the South China Morning Post.
The bike-sharing firm said earlier this week that it has processed 12 billion orders over the past two and a half years and the number of its average daily orders was 20 million.
As a survivor of the brutal bike-sharing wars in China that saw the top two players Ofo and Mobike spend billions to stay in the game amid cut-throat pricing and a government crackdown on bikes clogging up streets, Hellobike’s ambitions now go beyond bike sharing.
Last autumn, it rebranded itself as HelloTransTech in Chinese to signal its plan to expand into other transportation areas such as electric bike sharing and ride hailing and car pooling. That move not only put the start-up head to head with Meituan Dianping-owned bike sharer Mobike, but also China’s ride hailing giant Didi Chuxing.
The carpooling business in China has been mired in controversy ever since the murder last year of two female passengers who booked rides on Didi Chuxing’s hitch service.
Hellobike was ranked the fifth most popular transportation app between December 2017 and December 2018, according to a report by research firm TalkingData. The top four apps were Didi Chuxing, Ofo, Mobike and Dida Chuxing.
The TalkingData report showed that the penetration rate of bike sharing services in China reached its peak in the second half of 2017 and saw a steep fall in the first quarter of 2018. “The over-competition in the industry didn’t help retain users,” the report said.
Earlier this year, bike sharing pioneer Ofo was hit by a severe cash shortage which meant it could not refund user deposits, leading to huge queues of customers waiting at its headquarters demanding their money back.
The bike sharing business in China has been through three stages over the past three years – start-up, explosive growth and shrinkage, China International Capital Corporation (CICC) said in a report. But the growth rate for ride hailing and bike sharing can still reach 15 per cent to 30 per cent, CICC forecasts.