Bluegogo, one of China’s prominent bike-sharing startups, appears to be in a crisis and could be on the verge of going bust, reports say.
The company, which operates around 700,000 bikes across China, is facing a host of troubles, including financial issues, according to the reports.
The Beijing-based firm has been in arrears in employee wages and office rent payments, and a slew of senior executives have departed, Technode reported.
The headquarters seems devoid of staff, and the CEO appears to be missing in action, the report said.
Things are so bad that the firm is in the process of dissolving, and all salary payments to employees have been delayed until February 2018, it said.
Bluegogo, which was founded in November 2016, had raised a total of 600 million yuan (about US$90 million) from investors.
It was considered the number three bike-sharing company in China, and was once valued at US$140 million. The company even made an effort to expand to San Francisco and Sydney.
According to Technode, Bluegogo is facing a financial crunch and is unable to refund the deposits of its users, which are said to number around 15 million.
Users were required to put in a 100 yuan deposit before they could borrow the dockless bikes, after which they were charged 0.5 yuan per half hour of ride.
One user who talked to Tech in Asia said he applied for a refund weeks ago but has not received the cash.
Bluegogo’s Beijing headquarters have been vacated almost completely. In yet another bad sign, CEO Li Gang is said to be “somewhere overseas”.
Hu Yufei, who was Bluegogo’s vice president and the head of its market operation department, told Technode that he had departed the startup several months ago.
Another person was quoted as saying that “another team”, which could be reference to an outside firm, may be preparing to take over the Bluegogo brand.
According to a source quoted by Yicai, the business has US$30 million in debts.
Media reports have said that around 70 vendors had gathered in front of Bluegogo’s Beijing office recently as the company owed them money.
Bluegogo is well behind its larger industry rivals Mobike and Ofo, which have been backed by huge firms like Tencent and Alibaba.
The company’s struggles follow the demise of several smaller Chinese counterparts. Within the past six months, at least three bike-sharing startups – Wukong, 3vBike, and Ding Ding – have shuttered.
In October, Bloomberg reported that Ofo and Mobike investors were in talks to push the two Chinese bike-sharing startups into a potential merger.
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