Meituan-Dianping, one of the world’s most valuable start-ups, is pushing into mobility-related services as it expands its offerings for its 320 million annual active buyers.
Meituan-Dianping, China’s largest provider of on-demand services from food-delivery to ride-hailing, signaled its ambitions to push deep into mobility by acquiring Mobike, the country’s biggest bicycle-sharing firm.
Meituan will acquire 100 percent of loss-making Mobike for US$2.7 billion, according to a person briefed on the terms, who asked not to be named as the information was not public. Yicai, a Chinese news website, earlier reported the deal size.
Meituan CEO Wang Xing said in a social media posting that the Beijing-based company will “build a new future with Mobike.” Hu Weiwei, a co-founder of Mobike, said in a WeChat post that “it is a new beginning” and that there’s “huge space for imagination” to work with Meituan.
China’s internet companies are expanding beyond their traditional confines as they seek to cross-sell products and services to their users. Meituan is the world’s fourth largest unicorn with a valuation of US$30 billion, behind Xiaomi and above Airbnb in the ranking, according to CB Insights. Meituan started off as a group-buying portal, before it merged with Dianping, a restaurant recommendation site. The combined entity is now pushing into food delivery and recently introduced ride-hailing in several Chinese cities.
The deal comes amid the further consolidation of the bicycle-sharing industry in China and Meituan’s ramped up effort to expand into the country’s transportation-on-demand sector.
Bicycle-sharing has took off in late 2016 in China with dozens of startups placing millions of two-wheelers on city sidewalks, funded by venture capital money.
At stake is an industry that is potentially worth about 24 billion yuan (US$3.8 billion) by 2019, according to market research firm iResearch. Beyond the rental revenue and prospects for advertising, bike-sharing companies are also seen by Chinese tech giants as effective tools to promote mobile payments and to collect user data that in theory can be analysed for consumer patterns useful for a broader internet-enabled transportation industry that involves ride-hailing and the rental business of cars, motorbike and bicycles.