Chinese bike sharing company Mobike, which once attracted billions from big-name investors, said it is closing down all of its operations around the world, to focus solely on China.
Mobike laid off its teams in Asia Pacific countries, according to a report by TechCrunch, which were made up of about 15 full-timers plus contractors through India, Thailand and Malaysia, among other countries.
Laid off team members were told that Mobike was ramping down its business, but they weren’t told why. The Asia Pacific region has the most employees outside of China, so job cuts there were the first step in the consolidation process.
Future cuts will probably target Europe and America. The company has struggled recently, but so have most bike sharing startups in China, though Mobike was probably the most successful.
The company was purchased by Meituan for $2.7 billion less than a year ago, and before that it raised $900 million from investors like Tencent and Foxconn. The company, however, couldn’t find a sustainable business model.
For some employees, the news came out of nowhere, because they were under the impression everything was fine.
“I was shocked. The business is doing well from my perspective,” one source said. “But just because one country does well doesn’t mean the whole region will survive. Mobike ran a lot of analysis on profits and losses in the [overseas] region and came to the conclusion that there is no way it would turn profitable.”
When Meituan first bought Mobike, things looked better. Competitor Ofo was suffering financially and had to pull out of operations overseas. But Meituan also started to pull back on its mobility sectors, instead choosing to focus on food delivery and hotel booking. Also, competitor Hellobike, backed by Alibaba, entered the picture.
Employees of Mobike said they were still surprised because the company had done “a lot of cost-saving and progresses” recently.