“I’ve spent zero on advertising…and money just keeps coming in.”
In an artsy office located in Hong Kong’s Sheung Wan, Raphael Cohen, founder of the city’s first station-less bike sharing system, sounded a note of optimism about the chances of the bike-sharing boom spreading from China to Hong Kong.
Gobee.bike, which rents bikes to users for HK$5 ($0.64) per 30 minutes but doesn’t require them to return the bikes to a docking lot, is now on track to complete its series-A financing, according to Cohen. "We will make annoucements on funding probably by end of the month," he said.
Cohen told FinanceAsia in late April that he was targetting $80 million for this round in a combination of $60 million in debt and $20 million in equity.
The company’s earlier seed funding, led by Swiss Founders Fund, was used to launch 1,000 smart bikes on April 19 in the New Territories region of the city. The funding round was completed within two weeks.
“The debt financing is almost confirmed, which will come in several tranches, and the equity looks very interesting so far,” said Cohen, adding the firm is attracting money from investors in Hong Kong, the US and China — including some state-owned financial institutions.
Revenue is starting to come in too, according to Cohen — although he asked FinanceAsia not to disclose specific numbers, citing commercial secrecy.
Cohen has China’s bike-sharing craze to thank for his successful launch. “Two months ago I was in Beijing, and was impressed by how many bikes there were and how fast people were adopting them,” he said.
User education in Hong Kong is less necessary now thanks to all the publicity Gobee.bike’s Chinese peers have gathered, which means the start-up doesn’t have to burn as much cash on marketing. And “investors know the yield is going to be much higher, because we charge a much higher price,” Cohen said. Most Chinese firms charge Rmb1 or less per session.
In a similar fashion, California-based bike-sharing start-up LimeBike on March 15 announced it had raised $12 million in venture funding from investors including Andreessen Horowitz, IDG Ventures and DCM Ventures.
Jeff Jordan, a general partner at Andreessen Horowitz, said that “LimeBike is uniquely positioned to take the best insights and lessons learned from the China bike phenomenon.”
The real story, as they have noted, is going on in China.