China's share bike bubble has finally burst. The share bike industry, which has seen over 2.35 million bikes pumped into Beijing alone, has finally claimed its first major casualty with the reported collapse of bike giant Bluegogo.
Ranked in the top three of share bike companies just this year, the Tianjin
-based start-up at its peak boasted 20 million registered users and was once valued at 140 million USD. However, after burning through 119 million USD in venture capital producing more bikes (new lightweight bike models were unveiled just back in March), Bluegogo is reportedly 30 million USD in debt after failing to secure more funding.
bike-sharing industry was first gaining popularity, China saw more than 40 players
emerge in just over one year, leading to intense market competition
which would eventually trigger the closure of smaller companies. In the
past year alone, bike behemoths Mobike and Ofo have managed to raise 928
million USD and 1.3 billion USD respectively in order to fund further
expansions. It appears Bluegogo, like many other smaller players,
has finally fallen victim to Ofo and Mobike's stranglehold over the share bike market.
With Bluegogo's collapse, its CEO is reportedly in the wind. Registered users are struggling to have their deposits (99-199RMB) refunded, with many taking to Chinese social media to vent. However, since news broke, Bluegogo has maintained a steady radio silence. Its Weibo account has not been updated since November 10 and images on social media are depicting the company's dark and empty Chengdu office.
Bluegogo's collapse serves as a stark reminder of China's over-saturated bike sharing market. For many companies, they're now faced with the choice of either merging or accepting extinction.