Mobike, ofo say no to merger despite investor pressures

Despite the rumors and speculation surrounding a possible merger between Mobile and ofo, Mobike co-founder and CEO Davis Wang has made it clear again at TheYearAhead Summit that a “merger is not an option for the company,” local media is reporting.

Similarly, ofo founder and CEO Dai Wei also expressed previously that the company would not consider a merger.

Rumors about Mobike and ofo merger have been around for a while. It can be dated back to months ago when we joked about the same issue with our April Fool’s joke. Different reactions from the two companies sparked speculation about what was the real sentiment internally.

Half a year has passed and the current situation has made a merger more likely as more companies go out business and investors are looking for an exit.

What’s more interesting, the attitude of investors behind these companies are growing more favorable towards a merger to end the costly competitive battle and create a single dominant player, like the case in the merger between Didi and Kuaidi, and then Didi and Uber China.

Zhu Xiaohu, an early stage investor of ofo, said in September that the landscape in China’s bike rental industry has been settled with Mobike and ofo accounting for 95% share of the market. Both firms still need huge operation investments and only a merger could make them profitable. This statement is largely translated as investors are pushing the merger. Bloomberg reported that the investors of the two firms are in talks.

While we need to wait to see who wins this debate, but the situation sure reflects the conflicts between entrepreneurs and investors. Entrepreneurs prefer independence, but investors place profitability as their top priority.