Morning Report: Alibaba is upping the stakes in the dockless bike competition with a lead in an $866 million round in Beijing-based yellow bike company, ofo.
According to Techcrunch and China Money Network, Chinese internet (and everything else) giant Alibaba lead an unheard of $866 million corporate round into ofo—moving one step closer to winning its competition with Tencent in the dockless bike sphere.
This latest round brings ofo’s known aggregate funds raised since its creation in 2014 to $2.2 billion across nine funding rounds, with Tencent-backed Mobike trailing behind at a more modest $928 million. Ant Financial (Alipay) also participated in the round, along with Haofeng Group, Junli Capital and Tianhe Capital. Ant Financial has also backed Shanghai-based Hellobike which raised a $350 million Series D led by the group in December.
Crunchbase News has reported on the massive growth and lack of profitability of competitors ofo, Mobike, and (at the time) Bluegogo. Smaller competitors like Bluegogo have since slipped out of the picture in China, and as we covered again in January, the industry has been riddled with complaints of misuse, bike congestion, and overall annoyance with colorful bicycle graveyards becoming commonplace.
The hype over dockless bicycles also made its way over to the U.S., as U.S.-based LimeBike takes on ofo and Mobike at home.
And as we explored in January, this type of expensive competition is rather common in China. The BAT (Baidu, Alibaba, Tencent) trio has come to define the way that VC works in China, with ticketing services and other industries becoming the fighting grounds of Tencent and Alibaba, specifically where it concerns their payment systems WeChat pay and Alipay.
We’ll just have to see if this latest round was enough to put the competition to rest, or if Tencent will return with another big bag full of funds for Mobike.
From The Crunchbase Daily:
- President Trump has blocked Broadcom’s proposed $117 billion buyout of Qualcomm over security concerns. The purchase, had it gone through, would have been the biggest tech M&A deal in history.
- Chinese bike-sharing startup Ofo has raised $866 million in a new financing round led by Alibaba Group. The investment provides fresh fuel for Ofo in its heated competition with rival Mobike.
- Up until recently, WeWork has almost exclusively leased its coworking spaces. But a set of newer funds signals an ongoing strategic pivot toward ownership for the traditionally asset-light office space provider, Crunchbase News reports.
- Salesforce is acquiring CloudCraze, a provider of business-to-business e-commerce software, for an undisclosed sum. Chicago-based CloudCraze previously raised about $30 million in venture funding.
Illustration Credit: Li-Anne Dias