US-based LimeBike raises $50m… but Chinese bike sharing is making them sweat
San Francisco-based LimeBike just raised another $50m, led by Coatue Management, to expand Chinese-style bike sharing in the US.
Now valued at $225m, LimeBike launched just 10 months ago and has since raised $12m in VC capital from Andreessen Horowitz
But, in a market that’s poised to produce “the next Uber,” LimeBike’s got some pretty stiff competition: Chinese bike sharing companies Mobike and Ofo, have each raised over $1B in capital.
What does “Chinese-style” bike sharing mean?
Bike sharing has exploded in China, thanks to an influx of VC money, and the dockless model lets companies distribute their bikes around a city, then have users use an app/scan a code to unlock them from anywhere and drop them off wherever is convenient for their commute.
That means companies can launch in cities in just weeks, with no government subsidies or approval.
Meanwhile, US companies are struggling to catch up
Bike sharing has spread fairly slowly in the US, thanks to a system that requires users to dock their bikes at designated stations.
The dock-based system requires more capital upfront to install stations and payment systems — which is why Motivate, the leading US bike sharer (and the company behind the Citibike initiative), only operates in 9 US cities.
LimeBike hopes that emulating the Chinese model will help them compete (they’re aiming to launch in 30 new locations in the near future), but maintaining a fleet of 10k bikes still takes a lot of capital.