Chinese ride-hailing platform Didi Chuxing has reportedly secured a $1 billion round of fresh funding for its bike rental business Qingju, as the company seeks to diversify growth in the Chinese mobility market with a target of 100 million daily trips for the next three years. People familiar with the deal told LatePost (in Chinese) that Didi poached part of the investment away from Ant Financial’s Hellobike.
Why it matters: Already the biggest ride-hailing platform in its home country, Didi is digging a wide yet deep competitive moat around the broader Chinese mobility market. The company sees bike rentals as one of its main growth drivers.
- Didi on Friday announced it has shifted focus for a new round of growth from an “all-in-safety” strategy, with a list of goals called “188.” It refers to more than 100 million daily trips and 800 million monthly active users (MAUs) globally, and 8% penetration rate in the mobility market over the next three years, according to an announcement.
Details: Investors in the round include Lenovo-backed investment firm Legend Capital and an unnamed international venture capital firm, according to LatePost.
- LatePost added the overseas capital fund, whose name was not revealed, initially planned to invest in Ant Financial-backed Hellobike, but was later won over by Didi.
- In an announcement sent to TechNode on Monday, Li Kaizhu, co-founder of Hellobike said the recent funding to Qingju will not have a big impact on the market landscape. “[We] are acquiring shares respectively in a growth market,” Li added.
- Didi is now planning to further boost its growth at home and abroad, with goals of becoming a “one-stop mobility platform” offering two-wheeler (bike and electric bike) and public transport services, it wrote in an earlier announcement.
- Two-wheelers will take a large proportion of the company’s goal to achieve 100 million daily trips, LatePost reported citing an insider, who added the company is expanding the reach in Chinese lower-tier cities while improving efficiency and exploring revenue streams.
- Didi declined to comment. Legend Capital did not respond to a request for comment.
Context: Chinese bike rental services have struggled to break even and the recent cash infusion is expected to bring changes to the market.
- Qingju was incubated in-house and started operations in early 2018 after Didi was rumored to have tried and failed to acquire erstwhile star company Ofo. Qingju has been under the company’s two-wheeler business group along with Jietu, a motor scooter rental platform since mid-last year.
- Hellobike is currently the biggest market player with half of the market share since April 2018, Li Kaizhu told Bloomberg early last year. The company earlier this month said it had closed an RMB 200 million ($28 million) round from Shenzhen-listed electric product maker Hangzhou Zhongheng Electric to build charging piles for electric bikes.
- Hellobikes user base declined 11.5% month-on-month to 3.17 million monthly active users as of January, followed by Mobike with 2.8 million MAUs, according to recent figures from Chinese mobile internet research firm Trustdata (in Chinese).