(Yicai Global) Dec. 19 -- The founder of one of China's two biggest bike-sharing startups has dismissed the idea of them merging after key investors talked up the possibility, citing his commitment to competition.
"I believe competition is the driving force for corporate development," the Paper quoted Dai Wei, who is also chief executive at Beijing Bikelock Technology Co. (Ofo), as saying yesterday. It is the "prime power that drives innovation and leads to better services," he told a forum of up-and-coming young business leaders.
Ofo and Mobike, which together have a 95 percent market share, are burning through vast amounts of cash every month. They denied speculation of a combination, but many investors thought it was just a matter of time because of the "war of attrition," as Zhu Xiaohu, an Ofo investor and managing director of GSR Ventures, put it. Founders and backers are at odds. Mobike CEO Wang Xiaofeng has said repeatedly, "I don't think there's any possibility of a merger."
Liu Erhai, a leading investor in Ofo rival Beijing Mobike Technology Co., last week confirmed the merger speculation when he said the two would be open to it so long as neither had a controlling stake in the new company. Liu's venture capital firm Joy Capital LLP is Mobike's top investor after Tencent Holdings Ltd. Earlier that week, two Ofo backers said they'd welcome a union with Mobike as China's bike-sharing market becomes ever-more saturated and cut-throat.
"As far as we know, Mobike will not merge with Ofo," the Paper today quoted a Mobike investor as saying."As entrepreneurs, we are very thankful for all the capital support we have received, which has helped our company flourish," Ofo's Dai said. But "investors should understand entrepreneurs' ideals and determination. That is a process of positive interactions between entrepreneurs and investors, a process of mutual development, and a process of resolving issues and serving our society."
Mobike and Ofo have been the favorites of venture capitalists as their ubiquitous bicycles spread through China's cities, putting millions of units back on the streets and clogging up sidewalks for pedestrians. But boom has turned to bust for some in the 'Uber for bikes' business. Bluegogo, the country's number three player, went bankrupt last month.