On-demand ride provider Didi Chuxing has entered negotiations to acquire China-based bicycle rental service and portfolio company Ofo and has suggested a $1.5bn price, 36Kr reported today.
Ofo operates an app-based bike sharing service it claims has more than 200 million registered users across more than 20 countries including the US, UK and Japan.
However, the company announced layoffs last week that a source told Forbes would include roughly 70% of its US-based staff, effectively withdrawing from an aim of expanding the service from 30 US cities to 100 by the end of 2018.
The US downsizing followed reports earlier this month that Ofo is exiting Australia Germany, India, Austria, the Czech Republic and Israel.
Ofo has so far raised $2.2bn in equity funding, and e-commerce group Alibaba reportedly bought $3bn of shares at a $10bn valuation in a January 2018 secondary purchase. It has also secured some $360m in debt financing from mortgaging its bikes as assets.
Didi is lowering the prospective sale price with each round of discussions, a source told 36Kr. Ant Financial, Alibaba’s financial service affiliate, has also expressed interest in acquiring Ofo, but its offer is currently lower than Didi Chuxing’s.
The corporate first invested in Ofo as part of a $130m series C round also backed by Citic Private Equity, Matrix Partners, Coatue Management, GSR Ventures, Vision Plus Capital and private investor Yuri Milner in October 2016.
DST Global led the company’s $450m series D round in March 2017 at a valuation of just over $1bn, investing alongside Didi Chuxing, Citic PE, Matrix Partners and Coatue Management, and Ant Financial added an undisclosed sum a few weeks later.
Ofo secured $700m in a July 2017 series E round co-led by Alibaba and Hony Capital that also featured Didi Chuxing, Citic PE and DST Global, and $866m from Alibaba, Ant Financial, Haofeng Group, Tianhe Capital and Junli Capital in March 2018.
– Photo courtesy of Ofo. An earlier version of this article omitted details of Ofo’s March 2018 funding round.