China-based on-demand bicycle service Youon has filed to raise RMB598m ($87m) in an initial public offering that will give financial services provider Ant Financial an exit, Tencent Tech reported yesterday.
Founded in 2010, Youon operates a business that incorporates bicycle sales and rental, though the IPO prospectus implies it is focusing on the latter, putting it up against well-funded rivals such as Mobike or Ofo.
Youon was present in some 400 Chinese cities as of the end of 2016, though its growth in tier two and three municipalities has been uneven due to bikes at its dockless stations being confiscated by local officials for illegal parking.
Proceeds from the flotation, which would take place on the Shanghai Stock Exchange, would be used by Youon to hike research and development investment, build out its public bike network and pay off loans.
Ant Financial, the financial services affiliate of e-commerce group Alibaba, invested an undisclosed amount in the company in February this year along with IDG Capital, the local venture capital affiliate of media company International Data Group, and VC firm Shenzhen Capital.
Youon was set to receive more funding from Ant Financial and Shenzhen Capital the following month but postponed the investment due to public concerns about the messy way in which the industry operates, though that is likely a consequence of its rapid recent growth.