Bicycles are becoming more and more visible these days in Beijing due to a young but thriving industry that is now worth more than a billion dollars.
In fact, Ofo, just one of the two Chinese bike-sharing start-ups now, has a valuation of over $1 billion after recently raising $450 million in a fresh round of funding, Reuters reports. In a statement, the company revealed that investment group DST Global, ride-hailing giant Didi Chuxing and CITIC’s private equity arm were among the investors for the latest round.
The company currently boasts of having over 20 million registered users to date.
Its rival, Mobike, is not doing too bad either, having fetched a cool $215 million just a month ago from investors including Tencent Holdings and Warburg Pincus LLC. The two companies are head-to-head leaders of arguably the hottest sectors to attract tech investors recently.
Targeting both the young and the low-income consumers, the firms allow users to find and rent the bicycles through a smartphone app, and then leave the bikes wherever they want after use.
The companies have developed GPS-based apps that allow people to find nearby bikes, and charge based on how much time riders spend on them. Typical pricing per ride would fall between 0.5 and 1 yuan ($0.07 and $0.14) for every half hour.
Once a symbol of China’s working class, the use of bicycles has remained popular among students and urban commuters. While the concept of bike-sharing isn’t new, these Chinese startups have tweaked its system and made it more efficient and updated with the modern needs.