Chinese bike-sharing startup Ofo raises record $866m in latest funding round

Ofo has sped up its global expansion plans as policies on shared bikes tighten in China.

Ofo, the Beijing-based bike-sharing startup known for its signature yellow-painted dockless shared bikes, has raised $866 million in new financing led by Alibaba Group, the company announced this week.

The latest E2-1 funding round, claimed as the largest investment garnered in a single round by a bike-sharing startup, was backed by a number of other investors including Haofeng Group, Tianhe Capital, Ant Financial -- Alibaba's financial affiliate -- and Junli Capital, said the company.

Ofo's co-founder Dai Wei, the 27-year-old entrepreneur, said the Chinese startup is now transitioning from the rapid growth in the past to a new stage of high-quality development. He did not reveal the latest valuation of the company after the new financing round.

When Ofo completed its Series E funding round by raising $700 million in July last year, the company announced that its valuation exceeded $2 billion.

But Chinese reports indicate that further financing is still in progress as Dai has said the so-called E2-2 round of financing is "already on the road".

Founded in 2014, Ofo claims 200 million users across 250 cities in 21 countries, who have generated an average of 32 million daily transactions on the platform.

A number of Chinese bike-sharing startups have failed to survive, with players offering lucrative incentives to compete for users. As a result, the bike-sharing industry in China has been narrowed down to two major players: Ofo backed by Alibaba and car-hailing startup Didi Chuxing, and its arch-rival Mobike, backed by another Chinese technology giant, Tencent.

However, several local Chinese cities including Shanghai have limited the amounts of shared bikes available in the city after masses of improperly-parked bicycles have caused disruption. Both Ofo and Mobile have turned their sights to overseas markets and have swiftly landed in a number of major international cities over the past years.

In August, 2017, Ofo brought 1,000 bicycles to the streets of Seattle, Washington in the US, after successfully acquiring permission from local authorities, becoming its first stop in North America. It also launched in Sydney in October and doubled its fleet in Adelaide after a trial there.

The Chinese company, which also has business exposure in countries like the UK and Singapore, will start providing services in Japan at the end of March, according to local Chinese reports.

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