Mobike, the world’s leader in bike sharing and one of China’s new soaring Unicorns: Interview with Florian Bohnert, Head of Global Partnerships.
Written by Henri Delahaye & Bruno Smith
It’s striking to see the change that is currently happening in Chinese cities ! Soon it will be a worldwide phenomenon !
Brushed metal bikes with orange wheels are counted by tens of thousands on the sidewalks of every Chinese megalopolis. The bicycle which was for a long time considered as a sign of an “un-developed” Chinese society, is nowadays making an outstanding comeback !
Smart bikesharing industry: A very competitive marketplace
The smart bikesharing concept was created only 3 years ago ! It was created by 5 students of Peking University, which launched “Ofo” (historical competitor of Mobike)as they were urging to develop a bike-sharing system on their campus. Mobike started operating at city scale half a year before Ofo with GPS enabled bikes, not mechanical locks. It was created by Hu Weiwei and Davis Wang (Previous Head of Uber in China).
Mobike is known for its bright orange bikes and Ofo for its canary yellow two wheelers. Deep-pocketed investors have jumped on each because of their innovative ideas. Riders, after paying a deposit, unlock a bike via a smartphone app and, after they’ve reached their destination, park it essentially on a sidewalk or other public space (legal locations).
The main aspect of this resurgence is the race between all the start-ups that were competing to win the booming market of free-riding bikes. The winners (for the moment); Mobike and Ofo, have been distinguishing themselves by literally invading Chinese streets with their bikes. On the other hand, many previous competitors weren’t as fortunate and went bankrupt like Bluegogo.
In June, Mobike had just completed a sixth massive fundraising deal (Series E) of $600 million. Yet again, the giant Chinese conglomerates were involved in this craze ! Tencent, Ctrip (the largest online travel agency in China, which has recently acquired Skyscanner, the UK flight comparator for $1.9 Bn) but also, a long list of leading venture-capital funds and private-equity funds were involved such as Sequoia Capital and Hillhouse. This has boosted Mobike’s valuation to close to $2.5 billion ! The same features are noticeable for Ofo (comparable valuation) which was supported among others by Alibaba and Didi Chuxing.
Even if the “Mofo” tandem is far ahead, a new contender has emerged, thanks to $500 million in funding. This huge injection into Hello Bike shows investors (Fosun and GGV) are not spooked by the collapse of three smaller dock-less bike services in the past few months.
Mobike aims to tackle contemporary problems by revolutionizing urban mobility and contributing to sustainable goals.
Recent advances in mobile technology and big data analysis has enabled creative minds to rethink how people live and move through cities. “Smart bike sharing is one new business model that helps solve the last-mile challenge by leveraging big data insights to maximise efficiency in both its own systems and operations, as well as in those of cities.”
Smart bike sharing can be extremely helpful for city mobility planning, as it fills a gap in the current urban transportation infrastructure. The insights from the bike data can also be used to better cater to the population’s transportation needs.
“As the world’s first and largest bikesharing company, Mobike seeks to make cycling a more convenient and sustainable transport choice for urban residents through technology innovation.” Mobike’ and more globally the smart bikesharing industry are bringing structural answers to sustainability challenges. The fundamental shift in mobility patterns that it fosters, is reinforced by the sustainable output and in line with the UN Sustainable Development Goals.
#11: making cities inclusive, safe, resilient and sustainable;
#13: taking urgent action to combat climate change and its impacts.
This is far from being just some PR stunt. As a matter of fact, in December 2017, Mobike received the price “Champions of the Earth” by the UNDP.
For Liveable Cities, Mobike has been collaborating with municipal governments and other stakeholders to fully integrate its operations with the unique characteristics of each city’s broader transportation system. This strategy enters into an era of “new mobility” which is emerging.
A merger, a viable solution to become profitable ?
While the 2 Chinese giants of the bike sharing industry are progressively pursuing their expansions in Europe, North America and SA, they have been burning through cash, spending heavily on new bikes and generous subsidies to attract riders with plenty of choices.
“Mobike and Ofo are at a fork in the bike-sharing road: Do they hop on a tandem business model — accepting one company must ride in the front — or continue what has become a two-company race?” The latter solution could be self-destructive as investors are less willing to re-inject cash as there are only a few doors to make the venture profitable on the Long term. The merger to create a dominant industry player could be, according to various analysts, the only viable alternative.
We could link that confrontation to what happened in the 2015 merger between Tencent Holding-backed Didi Dache and Alibaba Group Holding-backed Kuaidi Dache. The result was the car-hailing giant Didi Chuxing, that won its battle against Uber Technologies Inc. It took control of the wheel of 90% of the country’s car-hailing market. Nowadays, Didi Chuxing claims 20 million rides per day, three times more than every competitor combined. It has developed partnerships in the US with Lyft, with the Estonian competitor of Uber in Europe: Taxify, and also recently in Brazil with 99.
Interview: Florian Bohnert or 富天宇, Head of Global Partnerships and International Expansion at Mobike.
We had the chance to discuss with Florian. From France, he pursued a dual degree at Ecole National Superieure des Mines de Paris and Tsinghua University In Thermal Engineering and Energy Management.
He is the Co-Director of the Shanghai based Incubator “Start-up Grind”, Mentor at “China Accelerator”, and University lecturer at Shanghai UIBE. Florian arrived in China 8 years ago, he has been experiencing first hand the Chinese society’s shift to new tech and its digital turn, making his opinion quite unique.
1/ Your expansion in Europe, North America, South America and LATAM is continuing, what do you think will make customers & City halls/local governments shift towards Mobike and not continue using large public bicycle sharing systems that are widely spread in Paris/San Francisco (Smovengo)?
The dock less model pioneered by Mobike provides a number of advantages compared to the traditional dock based model, including but not limited to no tax payer funding supporting the scheme, higher reliability, higher availability, more easily scalable, more plentiful aggregated data to provide the cities with data insights on urban design, as well as more freedom and a better user experience, fully digital through the APP. I believe these fundamental differences will increasingly drive customers and local governments to adopt the dock less model.
2/ One of your competitor’s from HK, ‘Gobee.bike’, was the first company to operate in Paris. They have recently decided to stop their operations in France and also in some other European cities due to theft and vandalism reasons. Does Mobike’s expansion strategy take these factors into account, that some countries have different views about public goods?
Talking about short, convenient, affordable urban commutes is a universal need; users also universally know how to respect a service that fulfills this dire need. Mobike spends a lot of time, energy and resource investing in the design of the bike itself to make it adapted to public use, therefore we don’t face the same issues as some other companies. Our bike features a live GPS in every single bike, a full aluminum frame, as well as one sided wheels and air-less tires. All these elements enable the bike to have over 4 year lifetime and minimal maintenance, enabling us to operate over 8 million bikes globally today, totaling 30 million trips per days, generating 40To of data daily.
3/ Your CTO Joe Xia, recently said during a Shenzhen Techcrunch event that Mobike will be pursuing an aggressive international expansion this year which aims at taking it to 200 cities across the world and reaching 500 million new users in the next 6 months ! Is it not too quick for a rising unicorn, to be able to implement this type of strategy in such a short period of time? Or does it enter into a ‘first mover’ strategy which is essential when you target a new country (notably in your competition with Ofo)?
Fulfilling the dire need of providing affordable, reliable and convenient transportation solution for short urban commutes is a huge global opportunity and we wish to enable as many people as possible to benefit from this added value in their local environment.
4/ Do many consumers have both applications (Mobike and Ofo) and use them on a daily basis? Also, What is your main comparative advantage compare to Ofo? Is there a big difference in terms of technology?
The DNA of Mobike is unique in the sense that it is focused on leveraging technology and innovation to solve urban transportation challenges. The 4 year life time of the bike and our vision of sustainability is also unique. Finally, we clearly think of ourselves as an IoT company operating in the field of public transportation, not as a bike rental company.
5/ Many newspapers and financial analysts declared that the merger with Ofo could be a solution to become profitable? Tencent and Alibaba as your main contributors are apparently willing to stop burning cash and inspire themselves from the past successful mergers: Didi Dache & Kuaidi Dache (car hailing industry) or Meituan & Dianping ? Is it what we currently call a “fake news” ?
There is no merger on the horizon as we are the only ones globally able to operate our proprietary technology at such a large scale.
6/ When we look at some district of Chinese cities, they are full of free-riding bikes and it doesn’t modify in a positive way the urban design of these squares ? How is Mobike trying to fix the problem ?
Modifying the urban environment takes a little bit longer as it involves more stakeholders. That being said, cities are already benefiting such as Shenzhen, where a study was conducted and showed that over 99% of the transportation blind spots were removed from the urban fabric. In many cities we operate in, the average congestion level are decreased, and the average car speed during rush hour increases. You can find more details in the PDF attached.
ps: If you are interested by the PDF above, It was provided by Florian to better grasp the stakes that it implies. Just send us a private message and we will be glad to share it.
7/Recently, Davis Wang was participating at a Fortune conference with Sam Zaid, founder and CEO of San Francisco-based Getaround, a car-sharing startup. Wang declared that the idea of combining bike-sharing and car-sharing is a natural way to solve the “last-mile challenge” that exists around the world. Will we see Mobike developing this type of partnerships in the future ? Is it your daily task as Head of Partnerships ?
We have announced a new venture into electric car sharing starting in the Chinese city of Guizhou and we are seeing incredible growth in this exciting new business sector.
In a nutshell, Mobike’s mission is quite revolutionary because it provides an affordable means of shared transportation for convenient short urban trips, while reducing congestion, and our city’s carbon footprint.
The most striking aspect is that these innovations that are reshaping “contemporary mobility” are from China which is often considered (wrongly so) as lagging behind in terms of Green Innovation. China is far ahead in this market and it appears that its citizens are much more flexible to changes to other western societies.
If you haven’t seen a Mobike in your street/city, get prepared ! It will transform your urban mobility in a very positive way. From a personal stand-point, It was super convenient when I headed back to Paris to use the same app to move around. Soon, you will need only one app to move in almost all globalized cities in the world.
