Some big changes are afoot for Mobike, the Chinese bike-sharing company that was acquired by IPO-bound on-demand service startup Meituan-Dianping for $2.7 billion last year. Mobike executives in Europe are raising $20 million from outside investors as part of a plan to spin off the European operation. Under the deal, Mobike would not completely divest from the spun-out division: it would retain a 49 percent share.
It had previously been reported that the company is in the process of spinning off its European operations as part of a wider retreat from global operations. Our sources have confirmed that the outside investment and spinoff would value the European portion of the business at between $80 million and $100 million.
A source close to the company also tells us that the deal is expected to close by the end of June. The plan is for Paul Zhu, currently European regional general manager for Mobike, to become CEO of the new EU Mobike.
Mobike has operations in the UK, France, Germany, Italy, Spain and The Netherlands, but it is not clear how many users it currently has in the region, or indeed globally. As it has shuttered operations in some cities in the region — most recently in Newcastle in the north of England — Mobike is also slowly rolling out services elsewhere — for example, this week in Padua, Italy.
Steve Milton, a UK spokesperson for Mobike, declined to comment for this article.
Bike-sharing startups, in which people use apps to find, ‘unlock’ and pay for bike rentals, were hailed as the next hot area for on-demand transportation for urban dwellers, following on from the fast growth of car-based services like Uber and Lyft (and more recently followed by scooters and e-bikes). Dozens of bike startups were collectively pumped up with hundreds of millions of dollars in funding as they ramped up their inventories to compete against each other.
It turned out to be a bubble in the making. In the worst-case scenarios, hundreds of basic, bright bikes filling city streets led to vandalization and clutter. In the best-case scenarios, some of the biggest startups, like Mobike, Jump and Motivate, eventually were acquired — in their respective cases to Meituan, Uber and Lyft. Still, among those and others like Ofo that remained independent, there have been wobbles, and others that appeared to have crashed out altogether.
Yet as e-hailing companies continue to diversify and expand into multi-modal transportation, there will be more acquisitions.
We understand that Careem, the Dubai-based transportation startup that itself is getting acquired by Uber for $3.1 billion, is buying a bike-sharing startup focused on the Middle East region (which means contenders could include Nextbike, Cyacle, and Byky). The deal is expected to close in coming days and may likely come into its own when a bike deal Careem announced at the end of April with the Dubai transport authority takes shape.
Meituan, which is now publicly traded and is valued at around $42 billion, more recently said it would rebrand Mobike to Meituan Bike, which will not only bring it closer to the parent company, but further distance it from Mobike’s earlier aggressive expansion and some of the bad reputation it picked up along the way.
Its international footprint isn’t the only thing that’s been slashed. Hongji Bike — co-founded by the original co-founder of Mobike — said it had picked up a number of engineers from the company to ramp up its efforts to build bikes, scooters and other personal vehicles for a variety of on-demand transportation startups. (Its customers include Lime, which ordered 40,000 scooters from it last year, the company said this week.)