Tencent ups the bike-rental ante with largest funding round so far

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Mobike today announced that it has raised over US$600 million in Series E, the largest ever financing round in the bike-rental industry.

This landmark round, putting the company at a valuation of between US$2 billion and US$3 billion (in Chinese), was led by existing investor Tencent and joined by Sequoia China, TPG, and Hillhouse Capital, among others. New investors in this round included leading banks BOCOM International, ICBC International, and global institutional asset management firm Farallon Capital.

Davis Wang, CEO and Co-founder of Mobike, said Mobike has three clear targets for the coming months: First, they will accelerate the pace of global expansion with a new target to be in 200 cities by the end of this year; second, they will increase investment in R&D of their IoT network and new technologies; and, third, they will invest in building a superior technology infrastructure to support their innovations in the field of AI and intelligent hardware.

Mobike claims it is now active in more than 100 cities globally and operates more than 5 million bikes around the world.

Since its official establishment last April, Mobile has secured an aggregate US$ 1.1 billion through eight financing rounds (in Chinese). Among its investors, Tencent, the lead investor in this round, has become the company’s largest investor, following its participation in the company’s Series C+ and Series D.

Alongside its role as a strategic investor, Tencent has also formed a strong business partnership with Mobike. Mobike bike-rental feature was added to Tencent’s WeChat Wallet in March. In addition, WeChat users can utilize Mobike’s bike- rental service by searching for the mini-app on WeChat, which has been available since this January.

The backing from Tencent, China’s most valuable public company, will undoubtedly fuel the growth of the bike rental startup. Chinese tech giants are joining in on the bike rental bandwagon either financially or technically, in an attempt to share in the boom sweeping all over the country.

Chinese ride-hailing giant Didi Chuxing has injected hundreds of million USD in three financing rounds of ofo, Mobike’s arch-rival. Besides, Didi has added bike-sharing service from ofo to its app. Alipay, the online and mobile payment platform operated by Ant Financial, has partnered with six bike rental firms to allow users to rent bikes through the app’s new ‘scan and ride’ function.

Artificial intelligence-obsessed Baidu, though having not made any investment in either of the bike rental startups, has recently teamed up with Mobike and ofo by integrating bike rental services on its Baidu map service. After downloading Baidu map app version V9.8.5 and registering via Baidu, users can use the rental service. The tie-up is expected to be a win-win strategy for the parties involved, which will not only improve utilization of the bikes but will bring more traffic to Baidu map and provide big data insights to it.

Ofo, the only bike-rental firm on the global unicorn company list released in May by CB Insights, is said to be seeking a US$ 500 million new financing round at a valuation of about US$3 billion.