$215m investment for Chinese bicycle sharing service Mobike

Chinese bicycle sharing firm Mobike has started 2017 with a $215m boost, as Series D funding signals the beginning of a rapid expansion of the service both in China and abroad.

If we use app downloads as a popularity metric, Mobike is the biggest bike-sharing company in the world. This investment from Chinese tech investment firm Tencent, among others, puts it ahead of its competitors - such as more conventional ride share service ofo.

Mobike launched in April 2016, but despite it's relative youth the app has already been downloaded over 3 million times.  The app itself is key to how Mobike operates. 

Where we're used to pick-up and drop-off stations for hire bikes in Europe, Mobikes utilises a GPS transmitter, QR code unlocking mechanism, and smartphone integration to give customers the freedom to leave a hired bike in the most convenient location for them. Any bike can be located, unlocked, and hired by nearby users using only the smartphone app.

The firm operates its scheme in nine cities across China, and is looking to expand. A spokesperson said: "What we can say is that our business continues to expand rapidly and we believe we are the largest player in our market by a considerable margin"

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The $215m investment is earmarked to raise Mobike above the competition in an industry Chen Lin, professor of marketing at China Europe International Business School, called "more competetive than the car-sharing industry."

"It's going to be a fierce fight in the bike-sharing industry," Chen Lin told the Financial Times. "There are more than 10 bike-sharing companies now with international funding.

"It's more competitive than the car-sharing industry was in the days of Uber versus Did, and it's more welcome by the government, so less regulated."

The Uber vs Didi cometition Lin referenced covers the car-sharing service battle in China which culminated in Didi's purchase of Uber China in a bid to find profit.

Interestingly, Mobike's closest competitor, ofo, is backed by Didi, while former Uber executive Davis Wang founded Mobike.

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Close and fierce competition isn't the only issue facing Mobike's development in 2017. The key features which make Mobike an attractive prospect - freedom to leave the bike wherever, and quick and easy QR code unlocking - have also caused big problems for the firm.

Reports that users have been taking the Mobikes into their homes overnight to ensure they have a ride to work in the morning, vandalism of the QR codes on each bike rendering them unhirable, and overriding of the locking mechanism resulting in theft, have caused the firm headaches.

Fears over the potential for profitability have also been raised by detractors. A Mobike can be hired for 1 Chinese Yuan per hour, which converts to 0.12GBP per hour.

What 2017 holds for Mobike and its competitors in China remains to be seen. But early claims that Mobike has over 100,000 bikes in Shanghai alone, while competitor ofo has only deployed 70,000 bikes across 20 cities, suggest that one firm is in the driving seat.