Chinese ride-hailing giant Didi Chuxing (“Didi”) announced that it has invested “tens of millions” of U.S. dollars into bike-sharing platform Ofo. The deal represents part of a “multi-layered partnership” in the urban mobility realm, according to a statement released by the company.
Didi Chuxing was born in early 2015 as the result of a merger between local rivals Didi Dache and Kuaidi Dache. Similar to Uber, it offers smartphone-based car services such as carpooling, taxis, and premium cars with drivers. Didi is the market leader in China by some distance, a fact that ultimately led Uber to merge its Chinese operations with Didi in a $35 billion deal just a few months back. This followed a gargantuan funding round by Didi, which saw Apple contribute $1 billion to the total $7.3 billion pot.
At the other end of the technology spectrum, Ofo has been doing something similar to Didi — but for bicycles — since 2014. Ofo originally launched on the campus at Peking University as part of a student project, and it follows the “access over ownership” model of many other sharing-economy companies. Today, Ofo says that its platform hosts some 70,000 bikes, which are shared by 1.5 million users across 20 cities.
The general concept behind Ofo — “an Uber for bikes” — is nothing new, and many startups have attempted similar businesses in recent years. But achieving scale with any such venture requires capital, and Ofo now has that with what is arguably one of the best backers it could’ve hoped for.
Didi has the technology infrastructure to support any kind of service that requires logistical organization, and it already offers taxis, car rental, bus services, chauffeurs, and more — there is no reason why bikes wouldn’t work just as well.
However, it has elected to invest in Ofo rather than acquire it, for now, though Didi has hinted that it could integrate Ofo’s offering into its own in the future. “Didi and Ofo will explore strategic cooperation in urban rideshare, including offering quality bike-sharing experience on Didi’s platform,” it said.