Key Ofo-Backer Talks of Potential Merger Between China’s Bike-Sharing Giants

Key Ofo-Backer Talks of Potential Merger Between China’s Bike-Sharing Giants

Yicai Global

Date: Thu, 10/19/2017 - 12:57 / Keywords: OFO

(Yicai Global) Oct. 19 – There has once again been talk in China regarding a possible merger of the country’s two largest bicycle-sharing companies.

Mobike and Offo account for 95% of the China’s bike sharing market at present but at least one key investor feels a merger between the two would be the best way to reduce their substantial operating costs.

Zhu Xiaohu, a managing director at GSR Ventures, one of Ofo’s early investors spoke of merger during the 3rd Fudan Chief Economust Forum in Shanghai. He expressed that it wasn’t too important which bike sharer initiated the deal as both firms stand to benefit from it.

Offo and Mobike have recently exerted efforts to expand overseas, and both have seen relative success. This week Mobike confirmed plans to expand into the UK city of Newcastle, representing the company’s 3rd foray into urban markets in country following London and Manchester.

However, it at home in China where the companies are experiencing some barriers to growth. Government policies aimed at reducing the number of shared bikes as part of a clean-up operation have resulted in new bike deliveries suspended for now in more than 10 cities across the country including Beijing and Shanghai.

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Keywords: OFO