(Bloomberg) -- Tencent Holdings Ltd. and Warburg Pincus led a $215 million round of funding for year-old Beijing startup Mobike, ratcheting up the competition in China's burgeoning urban bicycle-sharing scene.
The round brought in a clutch of new, influential names including private equity firm TPG Capital, Chinese travel service Ctrip.com International Ltd., and Huazhu Hotels Group. Existing backers Hillhouse Capital, Sequoia Capital also took part in the financing, Mobike said in a statement. They will work together to help travelers get around Chinese cities, the startup added.
Once emblematic of China's socialist working class, bicycles remain popular among students and urban commuters despite rapidly growing car ownership. Mobike is among the largest of a growing crop of private bike-sharing operators, known for its distinctive orange-hued and GPS-equipped bikes.
The industry is drawing hundreds of millions of dollars from investors betting that bicycles offer a more traditional alternative to the car-hailing that prevails in urban centers. One of Mobike's largest rivals, ofo, is said to be valued at $500 million after attracting investment from Xiaomi Corp. founder Lei Jun and Didi Chuxing, which ran Uber Technologies Inc. out of China in 2016.
Formally known as Beijing Mobike Technology Co., the startup has expanded at a rapid clip and now operates in nine cities across the country, with more than 100,000 bikes on the streets of Shanghai. It aims to stock at least 100,000 bikes in each urban center and explore other markets. Ofo has said it has more than 85,000 bikes, mostly on university campuses, and likewise expects to take its service to other Chinese locales.
Both are eyeing markets in Europe. There are about 600 bike-sharing operations globally, with a market that could grow by 20 percent a year to generate as much as $5.8 billion in revenue by 2020, according to consultancy Roland Berger.
“Our investment in Mobike demonstrates our commitment to supporting the development of the sharing economy and smart cities in China,” Tencent Chairman Ma Huateng said in the statement.
Mobike didn't disclose its valuation after the latest funding round.
To contact Bloomberg News staff for this story: Gao Yuan in Beijing at ygao199@bloomberg.net. To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan
With assistance from Gao Yuan
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