Meituan-Dianping, the world’s largest O2O lifestyle e-commerce platform that already offers a wide range of services from restaurant hunting, movie ticketing, travel booking to newly-launched ride-hailing, among others, just made a further move to diversify its businesses by adding bike sharing to its on-demand service clusters.
According to Chinese biztech media 36Kr, KrASIA’s parent company and local media Yicai, Mobike held a shareholders’ meeting last night that voted in favor of the sellout to Meituan at a price of $2.7 billion. The deal would be made in 65% cash and 35% Meituan equities.
The $2.7 billion label price goes lower than Mobike’s valuation in last round which stands at $3.45 billion, signifying that the company might not in a good shape since last round of financing.
At the shareholder meeting, Mobike CEO WANG Xiaofeng said he once insisted on the independence of the company. However, just like many other Chinese startups, Mobike could not avoid the dilemma of either siding with tech giants or competing against them, the source told Yicai.
“Many of our shareholders were struggling with the decision and asked for my advice. Frankly speaking, there is a huge potential but also challenges in the independence of Mobike,” said WANG at the meeting.
Rumor had it before that Pony Ma, founder and chairman of Tencent helped smooth the deal. Pony Ma’s Tencent backs both Meituan and Mobike.
Ofo, one of the bike sharing duopoly in Chinese bike sharing scene, was backed by Alibaba. Ofo just raised US$ 866 million in March from a group of investors including Alibaba and its financial affiliate Ant Financial.
Rumor has it that Didi Chuxing, one of Ofo’s largest shareholder, also offered to acquire the bike-sharing startup at a price of $600 million which would value Mobike at $4.5 billion, asking for fewer shares and control in Mobike.
Meituan’s acquisition of Mobike didn’t come out of thin air. Back in middle last year, the Meituan app embedded Mobike service to let app users find and unlock mobikes within just a few taps.
And according to previous media reports, Meituan in February led a US$ 1 billion round of financing for Mobike that saw incumbent investors including Tencent participating.
Meituan made the acquisition as the company has been pushing aggressively to further integrate online and offline services to complete its lifestyle e-commerce ecosystem. And mobility is a critical piece of the ecosystem.
“Mobike is a real ‘create in China’ startup which is rare…Meituan-Dianping and Mobike will push for a better future together.” Meituan-Dianping founder and CEO WANG Xing posted on Fanfou after the deal was made public by Chinese media. Fanfou is the first Chinese Twitter-like service WANG co-founded.
The bike-sharing startups haven’t proven they are in a viable business model in China. According to local media Lanjing TMT, Mobike’s total debt amounted to more than $ 1 billion. The Beijing-based company incurred a loss of RMB 680 million (approx. $ 107.8 million) in last December.