China bike-sharing firm Ofo’s CEO rebuffs offer and rallies employees to ‘fight till the end’
China’s dockless bicycle-sharing industry has seen a wave of consolidation, with market leader Mobike being acquired by Meituan-Dianping and Ofo the last remaining major independent player
Chinese bike-sharing firm Ofo held an internal meeting on Monday at which co-founder and CEO Dai Wei sought to rally the company by comparing the Beijing-based start-up’s current status to Winston Churchill and wartime Britain as portrayed in the drama Darkest Hour, according to people familiar with the situation.
In the film, Churchill, as prime minister, opposed appeasement and sought to fight against Nazi Germany against long odds. In the film, he sacrificed British troops to buy time for an evacuation of a bigger force of British and other Allied troops from the French seaport of Dunkirk.
Ofo’s dark times appear to refer to acquisition talks held with Chinese ride-hailing giant Didi Chuxing at the end of April, according to people familiar with the situation who asked not to be identified because the information isn’t public. Two weeks ago, Dai held talks with Didi CEO Cheng Wei about a potential offer but Dai told Cheng that Ofo would never give up, according to one of the people.
Ofo declined to comment on the matter as did a spokesperson for Didi Chuxing.
Dai told those attending Monday’s meeting that they can leave the company now if they do not want to fight until the end, according to the people. He said that the company would remain independent in future and that Ofo’s five founders each have a seat on the company’s nine-member board.
Like its main competitor Mobike, which was acquired by Meituan-Dianping, Ofo has been loss-making. This means that the company will have to rely on fresh capital injections to sustain its operations until they start to turn a profit. The bike rental industry in China has also come under pressure recently as dozens of Chinese cities including Beijing, Shanghai and Shenzhen, have barred the country’s more than 70 rental companies from putting more new bikes on the streets to avoid widespread traffic congestion.
Dai told employees at the meeting that although times are tough, it is not the “darkest hour” in his life - his toughest test was dealing with the early challenges of starting the bike-sharing business. Founded in 2015, Ofo currently has more than 2,000 employees and an estimated valuation of US$3 billion.
During Monday’s meeting, Dai also initiated a project dubbed “Victory”, which will be successful when Ofo turns a profit of one yuan, according to people familiar with the matter. The project name has been borrowed from Churchill’s trademark two-fingered “V” for victory hand sign.
Whether Chinese tech start-ups can stay independent in an industry dominated by a handful of giants is a question increasingly posed in boardrooms across the country.
Among all of China’s 124 unicorns – private companies with a valuation of US$1 billion or above – 50.8 per cent are controlled or backed by Baidu, Alibaba Group and Tencent Holdings, according to a February report by information service provider ITJUZI.