Chinese bike-sharing start-up Ofo raises funds from Jack Ma's Ant Financial

It also provides China's leading mobile payment solution, Alipay; reports Tech in Asia

Chinese bike-sharing unicorn Ofo announced an undisclosed round of investment from Ant Financial, Alibaba’s financial affiliate, on Saturday.

The funding is part of a strategic partnership between the two companies, which includes mobile payments, credit, and global expansion. Ant Financial has its own credit system called Sesame Credit, which incorporates users’ spending habits into calculating its credit scores. It also provides China’s leading mobile payment solution, Alipay.

Since ramping up last year, the industry has seen millions of dollars of investment as well as a torrent of bikes flooding Chinese cities, such as Beijing, Shanghai, and Shenzhen. In response, local city governments have started drafting regulations for bike-sharing as startups continue to launch new bikes, which can swamp pedestrian walkways and other public spaces.

In March, Ofo began offering deposit-free bike rentals to users in Shanghai who had Sesame Credit scores of 650 and above. In April, the bike-sharing startup extended that service to Hangzhou. Users that don’t meet Sesame Credit’s requirements have to put down a deposit of about $14 in order to start renting Ofo’s bikes, which cost less than a $1 an hour to use.

Partnering with Ant Financial could help the Beijing-based unicorn battle its domestic archrival Mobike, which has also landed several powerful investors, such as Tencent. Both Mobike and Ofo are accessible through WeChat, one of Tencent’s social messaging apps, which has about 889 million monthly active users.

For Ant Financial, partnering with Ofo would not only bring more traffic to Alipay, which is battling WeChat Pay to maintain its lead in market share, but also data, such as information on credit scores and user behaviour.
 

This is an excerpt from the article published on Tech in Asia. You can read the full article here.