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China's bike wars escalate as Didi throws weight behind Ofo
[HONG KONG] Didi Chuxing may have just upped the ante in the Chinese bike-rental wars, taking one of the industry's largest and fastest-growing players under its wing.
The ride-hailing giant said on Thursday it has integrated Ofo's service into its own mobile app, granting the startup access to the 400 million users across 400 Chinese cities that already use Didi to summon cars and taxis. That pits it against Tencent Holdings Ltd, a prominent backer of Ofo's arch-rival, Mobike.
Didi, which is said to be closing a funding round of at least US$5 billion as soon as this week, will allow users to rent Ofo's bright-yellow bicycles from within the popular app. That's the first step in "extensive" future collaboration as the ride-sharing giant promotes Ofo's name across China, Didi said in a statement.
The arrangement mirrors the way Tencent's WeChat - China's most popular social media service - integrated Mobike's service into its wallet interface in March.
Formally known as Beijing Bikelock Technology Co, Ofo has adopted Didi's take-no-prisoners approach. It's amassed US$650 million in funding and obtained an estimated valuation of more than US$2 billion. With backing from DST and the country's largest online financial company, Ant Financial, it plans to expand to 20 countries and about 200 cities in China this year.
In Mobike's camp is Temasek Holdings Pte Ltd and Hillhouse Capital Management. Both are taking their rivalry global: Mobile has pledged to expand in Europe on top of expanding to 100 cities in China this year.
The battle, carried out with costly subsidies and even free rides for users, has thrown the industry into bubble territory, Ofo's co-founder Zhang Siding said in April. At least 25 companies are providing similar services in China.