Thousands of Chinese share bikes Photo: VCG via Getty Images
Three of China’s bike-sharing companies are planning to enter the US market as competition heats up in domestic market, according to the Wall Street Journal on Friday.
Beijing-based bike-sharing upstart Bluegogo International Inc., which raised $58 million in funding this year, is testing the waters in the Californian city with 200 of its signature blue bikes, according to the Journal. The company is in talks with at least five more unspecified U.S. cities about introducing its bike-sharing scheme, according to Ilya Movshovich, its vice president for U.S. operations.
China’s two bike-sharing giants Beijing-based Ofo Inc. and Beijing Mobike Technology Co. also have plans to expand across the Pacific. Both companies displayed their bikes at the South by Southwest conference in Austin, Texas this month. Ofo, which saw Apple Inc. CEO Tim Cook drop by its office in Beijing this week, wants to introduce a fleet of 50,000 sharing bikes in about 10 U.S. cities by July this year.
Ofo and Mobike have garnered most of the more than $800 million that has poured into China’s bike-sharing startups since Jan. 1, according to data by Dow Jones Venture Source.
Unlike traditional bike-shares around the world, these upstarts run dockless bike-sharing schemes, which don’t limit bike parking and pick up to designated docking stations. They use public bike racks or sidewalk space instead.
The two companies’ valuations are above $1 billion each, the Journal cited people familiar with the situation as saying.
Mobike, backed by Chinese internet giant Tencent Holdings Ltd. and private-equity firm Warburg Pincus, this week entered the Singapore market with its orange and silver bikes. Ofo, whose investors include Facebook Inc. investor Yuri Milner, is already running bike-sharing trials in San Diego, California and Cambridge, England.
The bikes are aimed at commuters who need “last-mile” transportation to take them short distances from subway or bus stations. People use a smartphone app to unlock a GPS-equipped bike from a parking spot and ride them as far as they want, for about 1 yuan ($0.15) for every 30-minute ride in China, parking them in designated areas.
Investors are encouraged by high demand for the service in China. Mobike said its more than 10 million users have taken 400 million rides in 11 months since it launched in April 2016. Ofo, which launched as a student project in Peking University in 2014, says it has 20 million users.