(Yicai Global) Sept. 5 -- Cash-strapped Ofo, one of China's two leading bike-sharers, aims to raise billions of US dollars in a series E2-2 fundraising and reportedly hopes strategic investor Ant Financial Services Group and estranged backer Didi Chuxing will chip in, according to recent news reports.
Neither Hangzhou-based Ant, the Alibaba affiliate that also runs mobile payment platform Alipay, nor the world's leading ride-hailing provider Didi have commented on the matter. An operations director at a Chinese securities company told Yicai Global that this is likely because if a deal is taking place, it would be kept behind closed doors to avoid other investors getting involved and bumping up the asking price.
An Ofo representative said the news "seems to be true," but admitted to knowing little about it.
Bikelock Technology, the Beijing company behind Ofo, completed a USD866 million E2-1 round of financing in March, led by Alibaba, with Ant Financial, Haofeng Group, Jiangsu Tianhe Capital Management and Junli Capital also participating.
Ofo and archrival Mobike Technology have waged a fierce turf battle, burning through mountains of cash in the process. In recent months, Ofo has sought to retrench by exiting a number of overseas markets. Chinese media has suggested that Ant Financial or ride-hailing giant Didi Chuxing may bid to acquire Ofo at some point, but neither of these companies has publicly stepped forward. Both already have their own bike-sharing operations, Didi's Qingju and Ant's Hellobike, but they pale in market share comparisons with Mobike and Ofo.
Didi, the world's largest ride-hailing operator, was once Ofo's largest investor, but after it proposed a merger with Mobike that didn't leave space for Ofo Chief Executive Dai Wei, the bike sharer sought a massive cash injection from existing backer Alibaba, which was happy to oblige.
Both of the investors are looking to acquire Ofo exclusively, according to Sun Naiyue, an analyst at Analysys. Ant wants last-kilometer data to connect with its existing information on user destinations, while Didi is angling to enhance its comprehensive range of transport services, he added.
Ofo's debt has become a public matter since Shanghai Phoenix Enterprise filed a lawsuit against the company in Beijing on Aug. 31. The bicycle maker said that Ofo owes it almost CNY68.2 million (USD10 million), according to purchasing contracts that were signed last year. It was reported last December that the debtor had just CNY350 million in cash.
The company has also aggravated its logistics services provider Yunbird Technology, which reportedly visited Ofo's offices twice last week to urge a payment settlement. After a call from Yicai Global, staff at the Beijing-based courier said they would seek verification from Yunbird's business department.
Editors: Emmi Laine, Jamie Boynton