Kala Danche (卡拉单车) is back in business. As you may recall, last week we reported that the company had lost over 75% of their bicycles in less than 20 days of operation. Because of that, their only investor made a quick exit, taking all the user deposits with him and triggering a cascade of questions about user deposits on China’s leading bike-rental platforms.

However, according to the Legal Weekly(in Chinese), they may be back in business. As Lin Bin, the founder of Kala tells the story, after the news went viral, many of the residents of Putian, a Tier 4 city in Fujian where Kala’s failed launch took place, started looking for the bikes and gave the company information about where they were located. Since then, they claim to have recovered 70% of the total number of bikes with only 5% damaged. The founder even claiming that investors from Beijing, Shenzhen, and other big cities are now approaching him.

It’s no surprise that Kala’s story has taken off. O2O bike-rental is super hot right now, with local media covering every possible angle, from the guy who was put in administrative detention for 3 months and fined RMB 1000 to needles being put into bike seats and bike-rental being the “magic mirror that reveals goblins” ( 照妖镜 zhaoyaojing) of Chinese society. However, Lin Bin is quick to point out that, for Kala, their problem was management and lack of consumer education.

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John Artman

John Artman is the Editor in Chief for TechNode, the leading English information source for news and insight into China’s tech and startups, and co-host of the China Tech Talk podcast, a regular discussion...