Why these startups bike the bullet

RECENTLY the three-way bike-sharing war in Singapore notched up a gear as ofo raised US$700 million in Series E funding, Mobike unveiled new bicycles and oBike declared that it has local advantage. Despite large amounts of venture capital poured into these companies, the sector remains profit-challenged as players incur high costs but offer relatively cheap services.

Why do such ventures persist when it's obviously hard to make a profit, and why do investors back them? This question is key to understanding startup psyche. The answer to which should also prompt new methods of evaluating such "disruptive" businesses, especially if Singapore wants to attract more of them.

In a bid to uncover why unprofitable businesses continue with their ventures, The Business Times spoke with the three bike-sharing players here. The premise is that bike-sharing is a sector much like the rest of the sharing economy, where firms are unprofitable and burning venture capital to acquire users and market share so as to stay in the game and outlast their rivals.