Bike sharing apps in China are explosively popular, and the ransom value of bike apps is also skyrocketing.
CNBC reported that the value of Ofo, one of China’s top bicycle sharing apps, exceeded $ 2 billion.
This is more than double the number two months ago. CNBC, however, said that it is not unreasonable for a company that has only been in business for two years.
Ofo, which was founded in 2014, has already become the world’s first ‘unicorn enterprise’ with a pre-listing valuation of over $ 1 billion.
CNBC says there is no limit to Ofo, with more than three million yellow bicycles in 50 cities in China, and also in London and Singapore.
In addition, Ofo aims to expand its business to more than 20 countries by the end of the year, including Japan, Spain, France, Germany and the Philippines.
Dai Wei (26), a co-founder, said that most people in the world can ride a bicycle. “I think ‘bicycle’ is a global language.”
Apple CEO Tim Cook also recently visited Ofo office in Beijing. Oppo app is the most popular app in the Apple China App Store, with over 500,000 downloads a day.
Bicycles that roam the streets of China represent their respective companies by color, while Ofo is yellow. Due to its convenience and low price, bicycle apps are emerging in China.
However, there is no clear profit model, and some of them are forecasting that many companies will be out of the market.
Paul Gillis, a professor of the IMBA program at Peking University’s Guanghua School said, “The business model is somewhat complicated,” he said. “This business is very capital intensive and I have to keep my bike, but I do not know how to get a positive cash flow with the current low usage fee.”
Still, large investors are investing a lot of money in bike sharing apps. Ofo is invested by famous companies such as DST Global, who invested in Facebook and Twitter, and Didi Chuxing the taxi apps.
But there are also side effects after success, such as the ridiculed bikes cluttering public places, CNBC said.