In China, investments in startups are leading the bike sharing sector
Cycling tourism in Europe, as we have already reported, is a mature segment and is worth 44bn euros. Many Governments, in fact, invested or are currently investing in promoting this sector, for example Germany, Italy and Spain.
In China, this sector is now developing. There is a growing interest towards bicycles as a mean of transport, which is also symbol of a particular attention paid to sustainability. The Chinese Government, in fact, last year announced an investment plan in the tourism sector, which will be worth about 272.000 million euros, to be realised within 2020. Infrastructures and new services, in addition to attracting tourism flows, are expected to help the birth of a new entrepreneurship. A special attention is dedicated to “health-promoting”, which includes new itineraries for cycling tourism. What differentiates this sector in China is the number of startups which operate in bike sharing, and the volume of the investment rounds they have received since last year. According to China Money Network, Chinese startup operating in bike sharing have already raised almost 500 million dollars of investments.
Mobike, leader of Chinese bike sharing based in Beijing, last year received a series D funding round for about 200 million euros from Ctrip, Chinese colossus of online intermediation, reaching almost 300 million euros of total investments. Mobike’s competitor, Ofo, received an investment round of 85mn euros from several investors, including the smartphone manufacturer Xiaomi and Didi Chuxing, a company operating in ride sharing. Both Mobike and Ofo provide a service which is completely purchasable via smartphone, allowing their customers to leave the bike anywhere in the city.
Recently, Ofo received a further series E funding round of about 600mn euros: Alibaba, the popular e-commerce platform, was among the investors. According to internal figures, Ofo has provided 6.5 million bicycles for about 25 million daily rides, and is now planning to expand its activity in more than 200 global cities. At the same time, Mobike is already working in Singapore and in Japan, and has started recruiting in Washington. This could mean a future activity in the USA, and in the West.
YouBai, a startup based in Shanghai, received a series A investment round of more than 20 million euros, mainly from YiCun Capital and Black Hole Capital. The latter also invested 50mn euros in Tianjin-based Bluegogo, counting on 2.5 million users, and 18 million in Ubike. China Travel News underlines that, in the same city, XiaoMing Bike raised a series A funding round of 12mn euros and also a series B one.
As reported by China Travel News, it is expected that these startups are going to use the investments to buy new bicycles. Bike Italia reports that the bike sharing companies’ expansion in China generated an high demand for cheap bikes, and bike factories are not ready to face it. Mobike has even signed an agreement of exclusive cooperation with Foxconn Technology Group, in order to reach 10 million fabricated bicycles per year.
At Twissen we observed that also big players of the Travel & Tourism industry are becoming interested in the Chinese bike sharing sector, highlighting the importance of this segment. The openness of these companies towards the western markets could develop new scenarios of investments and acquisitions.