Chinese dockless bike rental titan ofo announced a new $866 million financing led by Alibaba Group, with participation from Haofeng Group, Tianhe Capital, Ant Financial and Junli Captial. The round marked a new funding record in the bike-sharing industry, the company claimed in an official statement.
ofo uses a combination of debt and equity financing for this round, the company noted. Rumors circulate in Chinese media earlier this month that ofo has secured RMB 1.77 billion ($280 million) funding from Alibaba through chattel mortgage financing. ofo declined to comment on the relation between these two pieces of news.
Dai Wei, founder and CEO of ofo said:
As the global leader in the bike-sharing sector, ofo has been transitioning from a phase of rapid growth to a stage of high-quality development. ofo will continue to put our customers first and lead the bike-sharing industry with technological innovation and efficient operations.
The funding comes at a time when it’s most needed while ofo is reportedly scrambling for cash. As a top player in China’s bike rental industry, ofo has been a darling of venture capitalist since its establishment. But its fundraising momentum slowed a bit since last July after receiving a $700 million Series E and that puts huge pressure on the company, which is entangled in cash-driving competition with Mobike.
The most popular theory behind ofo’s financing dilemma is that Didi is standing in the way, but Didi and ofo denied the accusation. Either way, it would be still interesting to know what changes this financing would bring to ofo’s board.
ofo reiterates its determination for independent development in an emailed announcement. “Ofo will drive long-term success independently with the continuing support of leading investors,” said the firm.
While the local market saturates, both ofo and Mobike are accelerating their expansion to overseas markets, which is expected to become a major driver for the industry.