Hong Kong -- China’s bike-sharing market is called a bloody battleground, with startups burning cash to win over customers. Initially, Mobike and Ofo were the most promising companies each valued more than US$2 billion. They also quickly expanding to overseas markets.
But the fame was short-lived. Mobike was bought by Meituan Dianping, while Ofo was revealed by a court in June to have no assets to pay back the deposits to around 12 million users. Both companies withdrew from their overseas ventures as well.
Hellobike CFO Fischer Chen speaks on July 10 at RISE 2019 at the Hong Kong Convention and Exhibition Centre. Photo by Harry Murphy/RISE via Sportsfile
This time it’s Hellobike, the latecoming bike-sharing startup in China, which has taken center stage. It was one of the main attractions at RISE, one of Asia’s largest tech conference taking place in Hong Kong from July 9 to 11.
Hellobike entered the market with a focus on lower-tier cities in China. And for sure, of the 20 million rides the company operates, 80-85 percent is for regular bike-sharing. The money comes from somewhere else: e-bikes.
Hellobike CFO Fisher Chen did not disclose whether the firm has broken even, but he did reveal to The Investor that the e-bike business became profitable shortly after it introduced the service in September 2017.
Unlike regular bike-sharing which triggered a cost-war, e-bikes have never been engaged in such a battle, Chen said.
The company now operates close to one million e-bikes with swipeable lithium batteries to stand as the world’s largest e-bike operator.
Despite the solid growth, Chen noted that the firm isn’t betting on e-scooters or overseas expansion for its ultimate success. “It won’t work in China: One scooter costs $5-600 but its life is so short at between three to five months, and fare value is much lower in China than the US.”
He added that due to this reason, Hellobike won’t attempt to go overseas, including South Korea.
In the meantime, the company will push its e-bike business further with what Chen calls “a disruptive model.” It has formed a three-party joint venture with Contemporary Amperex Technology, or CATL, and Ant Financial, Alibaba’s financial arm, also a major shareholder of Hellobike.
Chen, who served as CFO and senior vice president of two Nasdaq-listed companies and VP of JP Margan’s investment nanking division before he joined Hellobike in 2017, did not rule out an initial public offering.
“We need a strong market environment and strong fundamentals as a company. We do not rule out the possibility of going public,” he said.
By Park Ga-young (firstname.lastname@example.org)