Despite cash troubles, ofo denies renewed rumors of Didi acquisition

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Rumors of ofo’s acquisition by Didi Chuxing are once again proliferating, with reports claiming the deal could be worth $2 billion.

Minority shareholders have begun receiving documents about the deal, according to local media. However, ofo co-founder Yu Xin has denied the rumors, saying the company had dealt with them on Monday (August 20) and again on Wednesday (August 22).

Xiao Min, partner at Matrix Partners China, lead investor in ofo’s series B, said in China Entrepreneur Magazine that the rumors are “fake news.”

Rumors of Didi’s acquisition of the last independent bike rental company have been circulating for months. The original deal was thought to be $1.5 billion, almost half of that of Meituan purchase of Mobike.

Additionally, the company’s cash crunch has been well documented. In an attempt to generate additional income it began selling advertising on its bicycles and within its app. The move was blocked by local governments shortly after. However, the company resumed selling advertising within its app yesterday (August 22) with the launch of five-second video ads.

People close to the matter say the company has paid off just 20% of its RMB 3 billion debt. ofo also mortgaged its bicycles for an RMB 1.77 billion loan from Alibaba. ofo co-founder and CEO Dai Wei once likened the company’s troubles to the film “Darkest Hour,” imploring employees to fight to the end.

Also, the company has retreated from international markets, claiming that it was focussing on regions it deemed to be of “priority.” The company has already left or is in the process of leaving India, Germany, the US, Spain, Australia, and South Korea.

Amid its international exits, ofo has faced increased difficulties at home. Mobike recently did away with deposits to standardize its platform, while HelloBike has been winning the battle in lower-tier cities. Additionally, apart from the ban on advertising on its bikes, local officials have moved to limit the number of bicycles on the streets.