Singapore’s oBike reaches 10m rides but lags far behind rivals

Photo credit: oBike

OBike, a bike-sharing startup founded in Singapore, has just reached 10 million rides since it was founded a year ago. However, the homegrown company is still lagging behind Ofo and Mobike, its far-larger rivals from China.

Ofo, backed by Alibaba, announced in December last year that it saw 32 million rides a day. Meanwhile, Mobike clocked 20 million daily rides as of April 2017 and has Tencent in its corner.

In terms of funding from external investors, both companies have outraised oBike by many multiples, Tech in Asia data shows. Both companies managed this even if the Singaporean startup raised one of the largest series B rounds in Southeast Asia’s history. OBike declined to name its investors, though a “transportation platform” was involved.

In a competition where having a massive war chest matters, oBike may find itself needing to raise substantial capital fast or bow out. OBike appears to be at risk of losing its home ground in Singapore. According to App Annie, oBike ranks third and 10th in Singapore’s iOS and Android app stores, respectively. Meanwhile, Ofo and Mobike rank first and second in both app stores in the same country.

OBike co-founder Edward Chen says that its competitors had a two-year head start in China, allowing them to accumulate resources and operational experience. Looking ahead, oBike will be expanding overseas more aggressively.

Should oBike emulate Grab?

“Ofo will be the biggest concern for oBike, given they have backing from Alibaba and are ‘pushed’ to own the Asian market and take a bigger stake in Southeast Asia,” says Jackie Lam, co-founder of startup research firm Oddup. Alibaba already owns a majority stake in Lazada, a major ecommerce marketplace in Southeast Asia.

“Margins on bike sharing are super thin, and there are major community problems that have arisen (like dumping of bikes in rivers, as well as stolen or lost bikes). These will affect the sector and these companies need to have money on their balance sheet to support a large legal bill which may arise,” she adds.

Lam believes oBike should focus on Southeast Asia if it wants to carve out its niche. Grab took a similar approach, which is helping it succeed against Uber. However, oBike would need to scale back if it wants to do so, as it is already operational in 60 cities in 20 countries in Asia and Europe.

In addition to announcing its 10-million-rides milestone, oBike has launched a “franchise-like” initiative called the Global Business Partnership Program (GBPP). It invites partners to run its on-the-ground operations in various countries in exchange for support from oBike headquarters and a share of revenue.

“Through GBPP, oBike hopes to create a more sustainable and scalable business model, whilst boosting business and employment opportunities in the respective countries and communities it operates in,” says Chen.

Update (Jan. 4, 5:30pm): Added comments from oBike and an analyst.