Didi Chuxing is set to be the white knight for troubled bike-sharing startup Bluegogo, with Caixin reporting the car-hailing titan has agreed to a takeover deal to put it back on the road.
Caixin suggests Bluegogo, which effectively went out of business on November 20 after falling into debts of 30 billion US dollars, will be put back into gear by Didi after a deal was signed late last month.
While Caixin’s sources say that a transaction deal has not been confirmed, a takeover would mark a surprising return from the bike heap for Bluegogo, and signs of further frustration at Didi over a failure to gain more control of ofo.
Didi is believed to own a stake of between 25 and 30 percent in ofo, one of the two remaining bike-sharing giants alongside Mobike. After taking part in four funding rounds for ofo, including a 700-million-US-dollar round last July, Didi sent several executives to ofo to exert greater control, according to Chinese media. The executives abruptly returned to Didi, amid growing reports of a feud between the two companies.
Reports of a merger between ofo and Mobike in October led both companies to deny that they would join forces. Caixin reports that Didi made overtures to Tencent – an investor in Mobike – about the proposed merger.
Didi itself was born from a merger between Didi Dache and Kuaidi Dache, a move that proved successful as the hailing giant pushed major rivals like Uber China out of the market.
With some 700,000 bikes under its name, Bluegogo was a big player on the bike-sharing scene, third behind Mobike and ofo. It was the first Chinese bike-share company to expand overseas, experimenting in San Francisco – since then ofo and Mobike have both invested heavily into overseas markets in Europe and Asia.
Uncertainty over whether or not Bluegogo really has gone out of business is evident on the streets of Chinese cities – its bikes largely remain unused on pavements in Beijing, gathering dust as users leave for Mobike and ofo.
However, if Didi Chuxing is looking to exert much greater influence on China’s bike-sharing sector, Bluegogo has the infrastructure in place for Didi to make a quick launch of its own on the scene.
Bike sharing has grown rapidly in the last few years, with Bloomberg suggesting ofo and Mobike together could be worth some 4 billion US dollars. Both companies have heavily invested in overseas expansion – Mobike has some 200 million riders worldwide in 180 cities, while ofo aims to operate 20 million bikes in 200 cities by 2020.