Didi Chuxing and Alibaba’s Ant Financial are negotiating a deal for a joint buyout of bike-sharing startup Ofo for $2 billion, according to a new report that cited a source with direct knowledge of the talks.
The ridesharing firm and the Chinese eCommerce powerhouse are poised to mark the most recent deal in a wave of consolidations in the Chinese bike-sharing market, as thousands of bikes have littered major cities in recent years amid a large number of startups.
Didi, which already owns a stake in Mobike, has hired an outside firm to do due diligence on Ofo, the report said. The source noted that the offer price could be lowered or even withdrawn if Ofo’s financials are less than what they originally presented. The joint bid was originally reported by local Chinese media.
SoftBank Group, a leading robotics and technology firm based in Japan, is a shareholder in both Alibaba and Didi, and was a partner with Ofo in that company’s expansion into Japan in 2017. Ofo, based in Beijing, says that it runs more than 10 million bikes in more than 20 countries. However, according to local media reports, the company has either scaled back or shut down operations in two key markets, India and Australia.
In March, Ofo raised $866 million in a new funding round led by Alibaba, which the company claimed was a record haul for a bike-sharing startup. Spokespersons from Ofo, Didi and Ant declined to comment for the story.