(Yicai Global) March 5 -- Dai Wei, founder of China's bike-sharing giant Ofo, has received CNY1.77 billion (USD278.7 million) funding from internet mammoth Alibaba Group Holding Ltd. by taking out two chattel mortgages to ease financial constraints confronting the unicorn firm, Caijing reported yesterday.
"The deal does exist" and subsequent financing is still in the talks, online media 36Kr learned from a source close to the deal.
"Ofo got the financing by way of movable collateral is mainly because it could thereby bypass Didi Chuxing, Ofo's majority shareholder, since it doesn't need Didi's signature," the source told 36Kr.
Divergent business philosophies have opened a rift between the car-hailing giant and Ofo's founding team. Didi recently sidestepped Ofo for a separate investment in a new shared bike business and is unenthusiastic about supporting Ofo's financing efforts.
"Didi has verbally acquiesced to Ofo's financing this time, but agreed at the last moment, which has affected Ofo's financing," the source told 36Kr.
Didi has always been an 'obstructer' in Ofo's recent funding. Market rumors once claimed Ofo would obtain USD1 billion in funding from Alibaba, but this never eventuated. It was because Didi was unwilling to sign the investment agreement, 36Kr earlier reported.
Rapid cash-burning and an insufficiently clear profit-making model is exposing China's bike-sharing sector to a capital shortage.