China-based bicycle-sharing platform Bluegogo has decided to transfer its operations to its local peer Biker, Tech in Asia reported today.
Founded in 2016, Bluegogo operated a network of stationless bicycles that users can book, unlock and pay for through a mobile app. The company claimed to have more than 20 million users.
Bluegogo announced a $58m series B round in February 2017 led by Black Hole Capital that included medical technology provider Smart Xingtong and private investor Zhang Liang, but the deal never actually closed, according to TechNode.
The company has reportedly fallen $30m into debt following its inability to secure the series B capital, and competitors Ofo and Mobike both refused the option of an acquisition.
Bluegogo has suffered a week of bad press: TechNode revealed on Thursday that the startup stopped paying staff months ago and delayed any wages until February 2018, amid revelations that CEO Li Gang had absconded to an unknown overseas location.
Hu Yufei, vice-president at Bluegogo and head of the market operation department, was also revealed to have left the business months ago.
Bluegogo has also come under fire from customers, who have been unable to secure refunds for their deposits. Its social media accounts fell silent on November 10, leaving users in the dark until Gang published an apologetic letter announcing the partnership with Biker.
It is unclear, however, whether Biker will assume responsibility for Bluegogo’s customer deposits. Biker has meanwhile also announced it was taking over operations of Coolqi, another bike sharing company that has run out of cash.
Bluegogo had begun an overseas expansion that began with Sydney and San Francisco. The latter’s municipal government however passed regulation that prevented Bluegogo’s offering, shortly after the startup had installed hundreds of bikes.
Zhen Fund and Sinovation Ventures had supplied $8.4m of series A capital for Bluegogo in 2015 in what appears to have been the only equity funding it ever received.