China's Ofo and Mobike may be the Uber of bike-sharing thanks an early head start and more than $1 billion in cumulative funding that's financing aggressive international expansions, but that isn't deterring smaller players.
Hong Kong's Gobee Bike, one such upstart -- which literally operates in the shadow of those two Chinese giants -- just announced a $9 million Series A round aimed at expanding its six-month-old dock-less bike rental service overseas.
The round was provided by Grishin Robotics, an internet-of-things fund led by Mail.Ru co-founder Dmitry Grishin, with participation from Alibaba's Hong Kong entrepreneurship fund. Gobee previously raised a pre-launch seed round led by Swiss Founders Fund.
The service is much like Ofo, Mobike, Obike and others in that it provides bicycles which are rented via a smartphone app that scans the bike's QR code to unlock it. Each one contains a GPS chip which means it can be dropped off at and rented from any location.
Ofo CTO Austin Zhang explains the process of unlocking his company's bikes
Gobee was founded in February by Raphael Cohen (CEO) and Claude Ducharme (CTO), before going live in Hong Kong in April with a few initial hiccups. Cohen, who co-founded Hotel Quickly and was formerly with Rocket Internet's FoodPanda business, said it has accrued over 100,000 downloads to date and currently offers "thousands" of bikes.
Describing Hong Kong as its "proof of concept" market, Cohen said the plan is to expand the service into North America, Europe and other parts of Asia. He didn't provide specific details of expansion markets, but said that Gobee already has people on ground in "several" global cities. Gobee is likely to be in the market to raise more funding to realize that globalization push soon, Cohen admitted.
Ofo and Mobike are both aggressively looking to move their businesses outside of China. Both are targeting 100 cities worldwide before the year is out, and have already hit the UK and Singapore as initial forays into new territories gets underway.
Cohen admitted that the colossal size of these rivals is a concern for Gobee, but he believes that they have bitten off more than they can chew. His theory is that the sheer scale of their ambition -- and the importance of the Chinese market -- will leave the door open for nimble players to pick up the bike-sharing baton in places like Europe and North America.
"They are very focused on China, which is the world's biggest market for bike-sharing, but they have a lot still to do there with only about 10-20 percent of the market potential unlocked," he said. "But it seems like they not putting as much attention as they should. As has happened with other Chinese companies, they start expanding abroad and lose their focus on China, where new players came in and took marketshare."
Gobee isn't looking to make a move on China, but it is betting that the big players will ultimately divert their attention back to their homeland, leaving their global expansions deprioritized and weakened.
That's quite a risk given the backing that Ofo and Mobike have received, in terms of sheer financial numbers and major tech names, but Gobee's global push is also contingent on overseas markets taking to bike-sharing. Cohen said his experiences in Hong Kong leave him in no doubt, but it's too early to say whether Mobike and Ofo's overseas launches, which included vandalism and other issues in Manchester, will prove successful.