(Yicai Global) June 21 -- Competition in China's bike-sharing service market has become increasingly intense. Investors in some of the major market players recently engaged in heated debates over who is the most popular bike-sharing platform on social media.
Zhu Xiaohu, founder of GSR Ventures, shared an article on his WeChat account on June 19, claiming that Ofo is by far the most popular bike-sharing service judging by active users and user growth according to iResearch data. His company was the largest investor in Ofo's A-round financing.
Tencent Holdings, a long-time investor in Ofo's close rival, Mobike, is apparently not convinced by the conclusions suggested in the article. Its founder, Pony Ma, replied to Zhu on WeChat, saying that WeChat's payment data suggest that Mobike is twice as popular as Ofo. Intelligent bicycles have much greater development potential than conventional ones, alluding to the fact that Mobike has equipped its products with 'smart locks,' but Ofo has not.
Zhu struck back saying that Ofo also has smart locks installed on its products now, but Ma argued that they are not smart locks as they are incapable of two-way communication. However, his opponent believes that the best solution is the one that offers the highest price-performance ratio, implying that Mobikes are expensive to make.
The counter-argument from Ma is that all feature phones are simply no match for smartphones no matter how cheap they are. He also suggested that Zhu should not overlook this issue just because he has invested in Ofo. If Tencent invested in Ofo, it would have asked the company to change its business model.
In the end, the two billionaires made an agreement to wait for a year and see which company is more popular then.
All major Chinese social media platforms picked the entrepreneurs debate and widely covered and commented on it.
So, what makes Ma such a big 'fan' of Mobike? He is the boss at Tencent, and the company is a major investor in Mobike. The Shenzhen-based tech giant pumped USD55 million into the shared-bike operator in its C-round financing last October. It was followed by another two hefty investments in the D (USD200 million) and E (USD600 million) financing rounds that took place in January and this month, respectively.
Zhu's GSR Ventures, on the other hand, acted as a leading investor in Ofo's A-round financing and as a secondary investor in the B and C financing series (totaling roughly USD200 million). In fact, Tencent and GSR Ventures used to be partners, and they co-invested in cab-hailing app DiDi Chuxing.
After screenshots of their debates wwere widely posted on the social media, Zhu responded by saying that it was just a 'minor discussion between friends."