Mobike, which was set up at the end of December 2015, currently has a presence in almost 100 Chinese cities, having started out in Shanghai and Beijing. The firm provides a network of bikes that riders can access for short “last mile” journeys by scanning a code on the bicycle using the Mobike app.
Unlike some city-based bike rental schemes, Mobikes do not have a docking station they must be returned to. Instead, they have a built-in lock which is disabled via the app.
In January 2017, Mobike completed a $215m series D funding round, co-led by internet group Tencent. Venture capital firms Sequoia, Hillhouse Capital and Warburg, and hotel chain Huazhu Hotels also took part in the round.
The company raised further capital from many of the same backers in June, when a fresh series E round worth $600m was finalised, taking total lifetime investment in the business past the $1bn mark. At this point, Mobike said it had more than 5 million bikes and was providing as many as 25 million rides a day.
At the time, Davis Wang, the company’s co-founder and CEO, said: “Mobike is the global leader in smart bike-sharing and through our relentless commitment to innovation we offer the world’s most advanced and user-friendly bike-sharing platform.
“We are pleased to secure the continued support of leading investors who share our vision for the transformative potential of the Mobike platform. Our platform is already revolutionising how people move in cities around the world, transforming the urban transportation landscape.”
Wang said the latest round of investment would help the company accelerate the pace of its international expansion, increase R&D spending, and invest in technology infrastructure in the fields of artificial intelligence and intelligent hardware.
Mobike took its first steps outside China in March this year when it launched in Singapore, and it has subsequently set up a UK-based subsidiary and introduced its services to Manchester.
As well as a major investor in Mobike, Tencent is acting as a strategic partner to the company. This has involved Tencent making the firm’s platform available through its hugely popular WeChat service.
In 2017, Mobike has also established partnerships with companies such as Foxconn, Dow Chemical, Hanergy and China Recycling Development, in areas ranging from supply chain management and new material R&D, to mobile renewable energy and product lifecycle management.
Jeffrey Li, managing partner of Tencent Investment, said he had been following Mobike with great interest since its angel round of funding. “We did not make an investment then, although we really liked the product – the design of the bike. But at the time, we thought, is that going to be welcomed by the consumer? Can they get enough funding even to expand into a city like Shanghai and Beijing?”
Mobike had “some difficulty” in its series A round of funding, Li said. “But then they bounced back in their B round. By the time of the C round [when Tencent made its initial investment] they had a proven consumer user case, even though at that time they were still a very small company and only operating in one city, Shanghai.
“But we could see their business model was proven and the management team have a very strong CEO in Davis Wang. So that was the right time to make the investment.” Li added that, once Mobike’s business model was shown to be effective, it was crucial to make sure the company had enough capital to compete. “In China, speed is everything,” he added.
One of the keys to Mobike’s success, Li said, was that it could use Tencent’s platform to provide customers with access to its bike-sharing platform without them having to download a dedicated app. “That reduced a lot of the churn rate from the app downloading and other associated problems, which in turn helped them become one of the most popular services.”
Li said Tencent had also encouraged Mobike to follow in its footsteps and expand internationally, albeit in a relatively cautious way. “Global expansion is never easy and we know of a lot of difficulties, not only from the user but also from the policy and culture sides. The move into the UK, however, has been mostly done by the management team. They have found a friendly British city that already has a good relationship with China.”
Since starting up in Manchester, Mobike has introduced its bicycles to the Italian cities of Florence and Milan. And the firm says it plans to launch its service in parts of London this autumn. Steve Pyer, UK general manager for Mobike, said: “We are excited to be the first council and community-backed dockless bike-sharing scheme coming to London. Mobike is committed to help develop the bike-sharing culture across the globe through its discussions and collaboration with cities – and London is key in achieving this.”