Hellobike and Didi Chuxing Raise Heavy Investments amid Deepening Competition in China’s Mobility Sector

As the competition becomes even more intense in the mobility sector, Hellobike and Didi Chuxing have been raising more capital to gain supremacy.

The ride hailing giant of China Didi Chuxing is seeking to raise capital worth $2 billion from investors. On the other hand, bike sharing startup Hellobike has already raised capital worth $400 million in a recent funding round led by Ant Financial. The recent maneuver by major players in the bike mobility segment indicates that competition will only rise, despite the deep setbacks faced by this segment.

Didi Chuxing is a leader in the ride hailing sector, while Hellobike is the market leader in bike sharing. Recently, the two companies have attempted to diversify by expanding into each other’s markets.

Didi Chuxing entered the two-wheeler segment by establishing a new business group in June, which specializes in motor scooter rentals and bike sharing.

Meanwhile, bike sharing startup Hellobike expanded into the ride hailing segment by launching an app at the start of the current year. In May, the company revealed that during trial operations, 2 million people had signed up for its services across 300 cities in China.

To raise this capital amount, Didi will sell more shares. They will have the same price as shares sold in July 2018 to secure $500 million from Booking Holdings, a US travel company. After the deal, Didi Chuxing will be worth $62 billion. In December, the previous year, the valuation of the company stood at $51 billion. As a result of the latest financial transaction, Didi Chuxing will become the 3^rd biggest private technology company in the world after Ant Financial and Bytedance.

Ant Financial, the financial arm of technology conglomerate Alibaba, has led the recent round in which $400 million had been raised for Hellobike. The firm now has a valuation of $5 billion. In 2018, the firm secured 20 billion yuan from five funding rounds. The bike sharing startup is financially backed by GGV Capital, Primavera Capital Group and Ant Financial.

The increased competition is materializing against the backdrop of more austere regulations, which seek to control bike traffic in the country.

In the previous days, Didi launched an app that enables users to avail the ride hailing services of competitors. This was done due to rising costs and driver shortages.