Mobike, one of two fast-emerging on-demand bike rental services, has landed $600 million in new funding as it seeks to expand its business outside of China.
Bike rentals are shaping up to be the first global tech industry that was born in China. The principle is simple: bikes are fitted with GPS trackers which allows them to be picked up from and left anywhere using an app. With companies deploying thousands, and offering incentives to leave them in certain areas, the idea is that there should be enough supply in all parts of the city to enable rides at any place and at any time.
Mobike said it operates more than five million bikes, and its 100 million registered users take 25 million trips per day at peak times. The service is currently present in 100 cities — which was its expansion target for this year. Most of those are in China, but it has expanded to Singapore and it just announced plans to launch in Manchester, UK, its first city in Europe, by the end of this month. That’s just the beginning.
“We will accelerate the pace of global expansion and our new target is to be in 200 cities by the end of this year,” Davis Wang, CEO and Co-founder of Mobike, said in a statement.
Wang added that the money will also be spent on developing R&D and optimizing the use of artificial intelligence and technologies that can improve the user experience.
Mobike is just two years old but already this is its Series E. The money came from existing backers Tencent (which led the round), Sequoia, TPG, and Hillhouse Capital, with new investors BOCOM International, ICBC International, and asset management firm Farallon Capital among those joining. Prior to today, Mobike has raised over $300 million this year alone from investors like Tencent, Temasek, Foxconn and others.
The startup’s key rival is Ofo, another Chinese outfit. Beijing-based Ofo is backed by Didi Chuxing, China’s top ride-hailing service, DST Global, Matrix China, and Alibaba among other investors. It too has global ambitions, and it too has raised a truck-load of money.
Ofo’s business surpassed the $1 billion valuation mark earlier this year when it announced its $450 million Series D round in February. It said at the time that it had rented out more than one million cycles since June to over 20 million registered users — but this is a fast-moving space so those numbers will almost certainly have grown.
Beyond China, Ofo launched in Singapore in February, it has a trial service in Cambridge, UK, and it has spoken of its ambition to launch its service in the U.S. too. Interestingly, the U.S. has its own Ofo/Mobike ‘clone’ — LimeBike raised $12 million a few months ago to offer a homegrown alternative.