Ofo flew too close to the sun. Their dockless bikeshare model blew my mind when I first moved to China (I snuck a ridiculous quote into the China Times) and for a time Ofo was perhaps the hottest startup in the world. But by 2019, half the Ofo bikes I try to unlock in Beijing are broken, thousands have lined up outside Ofo HQ to demand refunds on their RMB 200 (about $29) deposits, and their CEO is now on a blacklist and barred from leaving the country.

Why was the rise so precipitous? A sexy model and investor FOMO. The model of spreading bikes around cities and allowing users to unlock the bikes with their phones for an upfront deposit and 25 cents per ride at first was incredibly attractive. Financial analyses of the firm “raised the fighting spirits of investors” who worried that if they weren’t able to wriggle their way into Ofo’s cap table, “everyone would know that they weren’t top-tier funds.”

On the WeChat public account GQ Report, Wei Shijie examines the history of the two-wheeled Icarus, concluding that what really doomed the company was its attempt to play Tencent and Alibaba off against each other

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Jordan Schneider

Jordan Schneider is a freelancer based in Beijing and the host of the ChinaEconTalk podcast.