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Updated: Cracks appear in DiDi and ofo partnership sparking doubts over ofo’s $700 million funding round
Insiders from ofo have confirmed to local media that ofo’s executive chairman, Chief Financial Officer, and other senior executives went on a “vacation” in July this year. A rift between ride-hailing giant DiDi and bike rental mammoth ofo might be the reason behind the event, Bianews has reported.
ofo has since published a statement denying the claims.
ofo’s goal is to become the world’s largest bike-sharing platform with two billion users. As an important investor and partner of ofo, DiDi has been assisting ofo in many respects, such as network traffic, talent acquisition, and strategy development. DiDi and ofo will continue to deepen their cooperation. It is standard practice for employees to take vacation for personal reasons. ofo will use all legal means to refute false media reports, and to firmly safeguard the legitimate rights and interests of the company.
According to the report, tensions began in April when young ofo founder and CEO Dai Wai was reportedly accused of wasting funds because of its lack of management experience and internal management problems. In July, ofo announced that senior vice president Fu Qiang will become ofo’s new president. On July 26th, ofo executives went on vacation. There are no specifics about the tensions between the two partners or what the “vacation” means.
The report states that DiDi has become the largest shareholder of ofo, accounting for more than 30% shares. Ofo first announced it will receive tens of millions of dollars in investments from DiDi at the end of September last year. In March, ofo published that it completed its D round with $450 million with DiDi as one of its investors. In July, ofo announced its Series E of financing worth $700 million led by Alibaba and other investors including DiDi. The news has brought into question whether the financing will take actually place. No official statement has been issued so far on the matter.
It is worth mentioning that on Wednesday Tencent held a startup event during which ofo investor Zhu Xiaohu (also known as Allen Zhu) from GSR Ventures once again stressed the need for the two bike rental leaders ofo and Mobike to merge. Founder of Mobike Hu Weiwei was also present at the event.
Updated, 24 Nov 2017: Now includes a response from the company.