SoftBank is in talks to invest in Chinese bike-sharing startup Hellobike, despite the sharp slowdown in the Chinese market following exponential growth last year, Reuters reports, citing people with knowledge of the matter.
The two companies have not reached an agreement on the deal, and the amount of investment involved has yet to be confirmed, according to technology publication The Information, which was the first to report the news.
As one of the major players in China’s bike-sharing sector, along with larger rivals Mobike and Ofo, Hellobike counts Alibaba’s financial services affiliate Ant Financial as its largest shareholder. Current investors include Shanghai-based conglomerate Fosun Group, electric car maker WM Motor, and GGV Capital.
Sources told Reuters that Chinese private equity firm Primavera Capital is also participating in Hellobike’s funding round, which seeks to raise US$400 million.
The startup was already valued at over US$2 billion after Ant Financial invested in it last year, a spokesman for Hellobike told Reuters.
Launched in 2016, Hellobike now has more than 200 million registered users and has a presence in 300 cities in China, according to the firm’s website.
It has reached 800 million users annually, and deployed 1.1 million bikes across the country, as of the end of 2017. The Chinese third largest player focuses its dockless bike-sharing services in third- and fourth-tier Chinese cities.
“At least 100 small cities have yet to see dockless bikes enter [into service],” Hellobike chief operating officer Han Mei told Tech in Asia in July. “[People in small cities] have very different transit conditions from the megacities.”
In September last year, the bike-sharing startup rebranded itself as “Hello TransTech”, in a bid to expand into other transportation services, after signing partnerships with transportation service providers including ride-hailing company Didi Chuxing and AutoNavi Maps, Alibaba Group Holding’s maps app.
Hellobike’s previous owner, also currently its second largest shareholder, is China-based bike manufacturer Youon, which also makes public bikes for city governments across the country, an advantage for its bike-sharing service in the domestic market amid tightening local scrutiny.
While Mobike and Ofo have retreated from overseas markets and shut down foreign operations to prioritize profitability, Youon is teaming up with local players in its plan to expand overseas, a noticeably different approach from that of its rivals.
Last month, Youon announced a joint venture with UK-based bike-sharing startup Cycle.land, and is scheduled to roll out its service in London next March, after getting the city government’s approval.
Youon’s ally Cycle.land will deploy its bikes and take care of on-the-ground operation, thereby helping Youon avoid regulatory restrictions in London.
In the fiercely competitive bike-sharing market, Mobike was acquired by China’s dominant on-demand online services firm Meituan Dianping for US$2.7 billion in April.
Hellobike last month said it received a proposal from rival Ofo for a merger, although it did not say whether talks are ongoing.
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