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January 15, 2018

Alibaba Invests $1 Billion in Ofo Bike Sharing Company

Ofo is a bike sharing company in China, and it has recently raised $1 billion from Alibaba and other investors in a funding round.

The cash injection raises the value of Ofo to $3 billion. This brings it to an equal valuation as Mobike, their biggest competitor and the market leader in China.

Whilst Ofo is backed by Alibaba, Mobike is backed by Tencent. In addition, the 3rd largest bike sharing comapny in China, hellobike, is backed by Antfinancial, who are affiliated with Alibaba.

In the last 6 months of 2017, 5 industry startups went under. 

They were often troubled with damage, vandalism and theft of their bikes. The bike sharing industry is likely to experience a shakeup and only the strongest competitors will stay afloat.

These bike sharing startups aim to turn a profit by charging fees to their users, but analysts have suggested that much higher profits could be made by selling advertisers and marketers access to their data

Mark Natkin, of Marbridge Consulting said: “You know where the user is much of the day based on their travel patterns, and can aggregate this to calculate the demographics of traffic flows through a city. And if you’re partnered with Alibaba or Tencent, you may have access to a staggeringly enormous vault of data based on the telephone number alone.”

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