Fledgling bike-share startup Mobike is to be acquired by Chinese ecommerce giant Meituan-Dianping. Terms of the deal were not officially disclosed, but local media reports have pegged the value of the transaction at $2.7 billion.

Launched in Shanghai back in 2016, Mobike rolled out to dozens of cities across China before going international last year, starting in Singapore, followed by the U.K.Japan, and a number of other markets. The company made its debut in the U.S. in September, kicking off in Washington D.C.

Mobike had raised around $1 billion in venture funding, with big-name backers including Sequoia, Tencent, and Line.

Competition

One reason Mobike may have elected to sell is the increasing competition in the “dockless” bike-sharing space. E-taxi giant Didi Chuxing announced it was entering the bike-sharing space back in January, while another Chinese bike-sharing company called Ofo — funded to the tune of more than $2 billion — entered its first U.S. market in August.

In the U.S., San Mateo-based LimeBike has raised more than $60 million and has been expanding across the U.S. into dozens of locations. And New York-based Jump Bikes recently raised $10 million to grow its electric-assisted bike-sharing service.

Put simply, competition is fierce, so Mobike has evidently decided that it’s better to progress under the wing of a bigger company that offers similar services. Meituan launched in 2010 as a group-buying website similar to Groupon and later merged with rival Dianping to become Meituan-Dianping. Today it is one of China’s biggest on-demand food delivery platforms, and it recently launched a ride-sharing service to take on market leader Didi Chuxing.

Acquiring Mobike not only helps Meituan-Dianping expand into a new vertical, the company also now gains a foothold in international markets.

“Mobike is not only a pioneer of the smart bike-sharing sector, but they are also extending their successful model of Chinese innovation to the overseas markets,” noted Meituan CEO and founder Xing Wang. “We have confidence in Mobike’s growth potential and the future of smart commute and will fully support Mobike’s continued efforts in technology innovation to bring quality products and services to customers.”

The Mobike brand will live on once the transaction is complete, with the startup’s founding team continuing to lead the business.