While the buzz surrounding China’s bike rental industry has yet to cool off, power bank rentals, another vertical under the rental economy business model is causing. What happened previously to the trendy sector is repeating itself again in the Middle Kingdom.
The carnival surrounding power bank starts with the influx of massive funding. Five startups in the industry have received a combined RMB 300 million (US$ 43 million) financing in less than ten days since the beginning of April with over 20 investment institutions entering the arena. Apart from the ones already secured funding, there are over a dozen similar ones looking at this emerging sector. Here’s a list of the major players in the field.
- Xiaodian (小电科技): RMB 100 million Series A led by Tencent and Hangzhou Vision Capital Management. Other investors include CDH Investments, GSR Ventures, DT Capital Partners and In Capital.
- Hidian (Hi电): Eight-digit RMB angel round from Zhizhuo Capital
- Laidian (来电科技): USD 20 million A round from SIG and Redpoint Ventures China
- AnkerBox (街电科技): Eight-digit RMB angel round from IDG and Sunwoda
- Mobao (魔宝电源): Seven-digit RMB angel round from a Biauto executive
The current concept of power bank rental has evolved a little bit and falls into to two categories. Represented by Xiaodian, the first category features fixed charging stations, which are placed in public places including restaurants, billiards rooms, KTVs, and subways. They are smaller in size as compared with their predecessors. The other category, represented by Laidian and AnkerBox, allow users to rent portable power banks which users can take with them and return to other power stations. Both of the models support mobile payments.
The rise of the new business is due in no small parts to the boom of bike rentals, where people see the possibility to create another hot vertical under the buzzword–“sharing-economy”. But to what degree the two businesses are comparable to each other and whether the success of bike rental can be duplicated remains another question.
The last-mile problem has been a long-term pain point for urban transportation. The possibilities to solve this problem through technological innovation are small in the short term. In addition, not everyone owns a bike, so bike-rental is a relatively high-frequency service addressing real headaches for customers.
On the other hand, power banks are more affordable and portable. The selling point is they spare users from the hassles of taking their own power banks with them, which means that the service itself is dispensable to some extent and is of much lower frequency because people can easily carry their own mobile charger wherever they go.
One of the factors contributing to the success of dockless bike-rental is its mobility, however, this is missing in the power bank businesses. In either case of the power bank models, uses are attached to some fixed location.
The battery life of most smartphones supports one charge per day now. With the development technologies, the battery of mobile devices will have larger capacities, which means power banks as a device categoy could die out in foreseeable the future.