Chinese bike-sharing start-up Ofo Inc. is raising up to US$150 million in fresh funds, aiming to achieve a valuation of about US$1 billion, the Wall Street Journal reports.
Ofo most recently raised US$130 million last October from investors including Chinese homegrown ride-hailing champion Didi Chuxing Technology Co., smartphone maker Xiaomi Corp., and U.S. technology-focused hedge fund Coatue Management LLC.
Russian billionaire Yuri Milner, an early Facebook Inc. backer, is also an investor in Ofo. It is unclear whether the same investors or new investors plan to put money into the new funding round.
A billion-dollar valuation would put Ofo on par with rival Beijing Mobike Technology Co., which closed a US$215 million funding round led by Tencent Holdings Ltd. and Warburg Pincus LLC early January at a valuation of around US$1 billion, according to people familiar with the situation.
Founded by five Peking University students, Ofo brought its yellow bikes to university campuses before expanding to big city streets.
It now has a total of one million bikes in 33 cities, according to Ofo spokesman Shi Shaochen.
By comparison, Mobike has services in 13 cities, according to Warburg Pincus, with more than 100,000 bikes each in Beijing, Shanghai, Guangzhou and Shenzhen.
Ofo users pay a 99 yuan deposit and one yuan per hour, with discount rates for students and teachers. Riders then get a combination code via an app to unlock the bikes.
Despite problems such as theft, vandalism and parking space availability, the bike-sharing business has been catching on in China, with more than 20 startup apps emerging in the past year. Ofo and Mobike are the most popular of those.
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