China tech giants bet on ‘Uber for bikes’

A symbol of China’s cities long before a boom in cars, snarling traffic and smog, the humble bicycle is making a comeback. Start-ups equipped with smartphone apps, GPS and scannable codes are selling cheap bike-sharing to city-dwellers as the way to beat jams on China’s most clogged streets. The rush to invest in car ride-hailing apps in China peaked with Didi Chuxing’s acquisition of Uber’s China arm in August, creating a $35bn giant. Now Shanghai’s MoBike and Beijing-based ofo - both use customised Anglicised branding - have raised big money in the past month alone from bullish investors on the hunt for China’s next tech ‘unicorn’. MoBike, backed by Chinese internet giant Tencent Holdings among others, closed a $100m funding round this month, two sources told Reuters. Ofo raised $130m this month from investors including Didi, smartphone maker Xiaomi and US hedge fund Coatue, which has backed Facebook and Google. “We did not expect there to be so many investors and we did not expect this field to get so hot,” ofo co-founder Zhang Siding, 26, told Reuters in an interview. Zhang was one of five Beijing students who launched the firm in 2015, now charging 1 yuan ($0.15) per hour to rent. MoBike, also founded in 2015, and ofo say several hundred thousand residents of Chinese cities use the services every day, though tech sector watchers estimate neither yet makes a profit. Neither discloses earnings details. Each claims to be the first of its kind in the world, raising the question for the firms and their investors of whether the model could be replicated in other countries.Mobike: Bringing ‘sexy’ back?Riders use smartphone apps to unlock and pay the cost of hire, and they are free to leave the bikes wherever their journey ends, a feature ofo and MoBike say is a major plus over traditional rental services, which require bikes to be returned to a parking station. MoBike’s app also allows users to see nearby vacant bikes using a GPS tracking system. “I find it very convenient, because road traffic is so bad, especially during rush hour,” said Yu Xiaoxia, 29, a teacher in the southern Chinese city of Guangzhou who pays 1 yuan per half-hour to use MoBike.