Alibaba, the Chinese technology juggernaut, is considering another investment round for bike-sharing firm Hellobike. During the past two-and- a-half years, the Shanghai-based startup has been processing about 12 billion orders. The Chinese media reported that Alibaba is planning to raise hundreds of millions of dollars in investment for Hellobike soon. Responding to these reports, an Alibaba spokesperson said the possibility is under consideration. The spokesperson did not specify the investment amount or any other details.
The 3-year-old bike-sharing startup already has the backing of leading investors, such as Ant Financial (financial arm of Alibaba), GGV Capital, Primavera Capital and others. Hellobike has already raised capital in an investment round as recently as January this year. The round was led by Ant Financial. The amount of the funds raised was not disclosed.
The thriving bike-sharing startup has been processing 20 million orders on a daily basis. Hellobike survived a hard fought price war with bike-sharing market leaders Mobike and Ofo. These two leading firms spent billions of dollars on maintaining supremacy in the Chinese market. Hellobike also had to face a dire scenario when Chinese authorities stepped in to reduce congestion caused by excessive bike traffic.
The startup has not only survived, but it has prospered as well. Hellobike is now seeking to diversify. Consequently, it restyled itself as HelloTransTech to manifest its intention of expanding into other modes of transportation, such as carpooling and electric bike sharing. The firm now faces serious competition from the $60 billion ride hailing behemoth Didi Chuxing and Mobike, which is owned by Meituan Dianping.
According to data released by TalkingData, Hellobike ranked 5th among top transportation apps from December 2017 to December 2018. TalkingData further stated in its report that bike sharing experienced a massive slump during the first quarter of 2018 after attaining its peak in the latter half of 2017. Despite stiff competition, the bike-sharing market fell.
China International Capital Corporation mentioned in its report that the bike-sharing industry has seen three stages of development in only three previous years. These stages include startup, rapid growth and a sharp fall. Nevertheless, the corporation has set a 15 to 30 percent growth forecast for the bike-sharing sector in the next year.
Major market player Ofo faced a serious cash shortage earlier this year, meaning that it was unable to refund its users.
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