Bluegogo, one of China’s largest bike-share companies, appears on the edge of ruin, with its office empty, debts unpaid and its CEO suddenly absent. The firm, which has raised $58 million and funded moves into Sydney and San Francisco, has outstanding debts of $30m it cannot pay, one insider told Yicai Global.
Bluegogo, which has 700,000 bikes in its network, was considered the third in an industry triumvirate that includes Mobike and Ofo. Mobike, which was founded just two years ago, has amassed investment of a little under a billion dollars from Qualcomm, Tencent and other giants. It has a million users and is currently valued around $1.5bn.
Ofo, the elder statesmen at three years old, has received $1.3bn in funds from the likes of DiDi Chuxing and Alibaba. It claims to have 60m members, and a value of around $3bn. This week it announced it would be launching Pikachu-themed bikes on the streets of Shanghai.
The fierce proxy war that has gripped China’s bike-share market, appears to have knocked out Bluegogo. The Beijing-based firm was criticized for opaque customer service practices, which left many users unable to retrieve deposits. A Chinese blogger who visited the company’s swanky office found it almost entirely empty. Vice president Hu Yufei told TechNode he left months ago, and that some staff are still waiting on wages.
Other industry aspirants including 3vBike, Ding Ding and Wukong have already shuttered in their quest to attract China’s booming bike-share cyclists. Shanghai is the city with the world’s most shared bicycles, with 450,000 – almost all of which have appeared this year. They are spread across 450 schemes, turning profit-making into a huge pitfall.
Other problems, such as theft and destruction, have put paid to efforts like Wukong’s, which admitted this June that 90% of its 1,200 cycles were stolen or lost. Once a symbol of poverty, cycling has become a huge business in China’s biggest metro areas, where road traffic is chronic and a leading contributor to dystopian levels of air pollution.
Bluegogo’s apparent demise suggests that China’s early bike-share scramble has been won by Ofo and Mobike, which experts believe currently command around 95% market share. The remaining 5% will likely fall as well, providing the backdrop for a potential cycling Cold War between two heavily-backed behemoths.