China has just seen its first merger in the burgeoning bike-rental sector. Youon (永安行), the Changzhou-based bike-rental startup which went public in August, announced yesterday the merger of Hellobike, another bike-rental player in China.
Youon posted a statement on its website, announcing its sister company Youon Ditan (永安行低碳科技) merging with Shanghai Jun Zheng Network Technology (上海钧正网络科技) which operates Hellobike. The new firm is co-owned by Youon, Ant Financial, and Shanghai Jun Zheng, and will be operated by the original Hellobike team (in Chinese), local media reports.
Founded in 2016, Hellobike has been focusing on the market in the second- and third-tier cities in China, and has placed about 3 million bikes with over 30 million registered users. After the merger, Youon has great potential to gear up to face off against the country’s largest bike-rental players ofo and Mobike.
Ant Financial, the second largest shareholder of Youon Ditan, will play a crucial role after the merger, pushing forward more collaboration among Ant Financial, Youon, and Hellobike in the bike-rental sector.
Youon was founded in 2010, and its major businesses include the sale of public bikes, the operation of a government-funded public bike-rental service with docking stations, and the dockless bike-rental service funded by private investors.
It’s worth noting that Youon removed a huge amount of its bikes from China’s streets a month after its IPO. The merger, however, marks Youon’s ambition to bring up its dock-less bike-rental business to full strength. Yang Lei, Hellobike’s CEO, said in an internal email (in Chinese) that he will serve as the CEO of the new company after the merger, local media reports.
Correction: This post originally stated that Youon acquired Shanghai Jun Zheng.