In 2017 bike-sharing exploded in China. The bike-sharing revolution aims to put China back on two wheels. However, the bikesharing bubble now seems to be bursting. Bluegogo is China’s third largest bike sharing company after Mobile and Ofo. It reportedly ran into financial trouble burning through 600m yuan in investor funding. At peak Bluegogo had deployed 700,000 bikes across cities in China.
That Bluegogo was in trouble became obvious when Chinese social media erupted with users complaining they were unable to get their deposits back. It's also been reported by ChineMoneyNetwork.com that Bluegogo founder Li Gang has fled the country.
Internet got flooded this year with shocking images of abandoned bicycles piled in mangled heaps across Chinese cities. These bikeshare companies let customers rent bike using their smartphone, and bicycles could be dropped off anywhere. Users usually pay a deposit fee of 99 to 299 yuan depending on the company and then are charged a fee for every 30 minutes of use.
Bluegogo had raised RMB400 million from Beijing-based Black Hole Capital, a venture firm founded by Zhang Liang, the son of Chinese property giant R&F Properties’ co-founder Zhang Li. Smart Xintong. A Shenzhen-based healthcare equipment developer, also participated in the round that valued Bluegogo at RMB1 billion (US$140 million) post-money.
The big question now remains if the users will at all get their deposits back. It's also interesting to know how the other bikeshare companies survive the crunch.
