With $700 Million Chinese Bike Sharing Firm ofo Targets Europe
BEIJING, China – A consortium led by Alibaba is investing US$700 million (€615m) in ofo; the world’s largest bike sharing company. With these millions ofo is to conquer the world starting with Europe.
Two years ago not many people had heard of him or his company. Today, ofo founder Dai Wei (26) heads a company which is the largest supplier of public bikes in the world. He named his company ofo as the letter combination resembles a bicycle. Dai’s yellow bikes can be found in huge numbers in any city in China. In a recent interview published in a Dutch financial newspaper (Het Financieele Dagblad) he revealed plans to internationalize his business.
Dai is somewhat cautious about his plans for outside China. In his home country Ofo currently operates a fleet of over six million bicycles. “We are still in the phase of getting to know the markets outside China. We have people in several European countries. They do the preliminary research and talk to governments.”
The past months the former student of the Beijing University Dai has shown China that for him, growth has no limits. “We now have some 2,500 full time employees. One year ago we only had 50.” However, bike sharing schemes in China are reaching their limits as there are currently over twenty different bike sharing platforms. Two of those recently went bankrupt, as supply is exceeding demand at numerous locations.
In Beijing many sidewalks are impassable because of hundreds of thousands brightly coloured public bikes, spread over China’s capital. The yellow ofo’s, together with the orange Mobikes , represent the majority. “Town wise we have to find the most efficient way to tackle the problems,” is Dai’s comment on this.
Running break even
These problems come with the fact that public bikes do not have to be returned to docking stations. They simply use QR codes to be scanned by smartphones for unlocking. The costs of one ofo bike ride stands at CNY 1 (€0,13) for 1 hour. But ofo customers have to pay a deposit, and have to put money in their account to share a bicycle. “My expectation is that for
this reason, we will run break even by November or December of this year. Even if the competition is though, in 2018 we will be profitable.” Ofo expects to break through the limit of 100 million rides a day soon.
Making bike ownership dispensable
Ofo founder Dai Wei’s dream is to have an ofo bike available on every street corner in every city of the world, within five years. He says “Our mission is to make bike ownership dispensable. I think the bicycle has a good chance to play a pioneering role in the sharing economy.”