Alibaba raises $700 million for Ofo

Alibaba (BABA) was among the investors that recently helped raise more than $700 million in funding for Chinese (MCHI) bike-sharing operator Ofo. The funding round also drew the participation of investors such as CITIC Private Equity, Hony Capital, and Didi Chuxing—China’s equivalent of Uber.

In 2016, Apple invested $1.0 billion in Didi Chuxing, and it didn’t take long after that investment before Uber surrendered to competition in China and sold its assets to the rival.

Putting Alibaba’s Ofo Investment in Perspective

Ofo’s expansion plans

Ofo is one of China’s leading bike-sharing startups. The firm operates in 150 cities in China, and its fleet includes more than 6.5 million bikes. It plans to reach 200 cities in 20 countries by the end of the year. That expansion would see Ofo’s fleet increase to 20 million bikes.

Bike-sharing is shaping up to be a huge business in China thanks to efforts to reduce air pollution and beat traffic congestion in China’s major cities. Ofo customers pay a small fee to ride its bikes. The company uses a smartphone app to enable its customers to access a bike.

Massive revenue opportunity

According to market research firm ReportLinker, China’s bike-sharing economy could be worth more than 29 billion yuan (about $4.4 billion) by 2021, up sharply from an estimated 8.9 billion yuan (or $1.3 billion) this year. Ofo competes with Beijing Mobike Technology and Youon in China’s bike-sharing industry.

As for Alibaba, investing in the bike-sharing economy can be viewed as part of the efforts the company is making to diversify its revenue streams. Alibaba depends on e-commerce for the bulk of its revenues, yet the sector is becoming more competitive. Alibaba is facing fierce e-commerce competition from Amazon (AMZN), eBay (EBAY), and (JD).

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

14 Jun

Why Kimberly-Clark Stock May Stop Rising


Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.