ofo Rejects Didi’s Acquisition and Insist on “Fight Until the End”
Dai Wei, the CEO of bike-sharing platform ofo, turned down a potential takeover by Didi Chuxing and called on employees to “fight until the end,” according to South China Morning Post.
Following a recent wave of M&A appearing in the bike-sharing industry in China, such as Mobike’s acquisition by Meituan, China’s one-stop life service platform, ofo became the last major independent operator in the bike-sharing field.
The report says that Dai Wei, the founder and CEO of ofo, compared the current obstacles ofo had to the plight that UK was confronted with in the Second World War, as is described in the film “Darkest Hour”. He insisted on fighting until the end in ofo’s internal meeting on Monday.
According to people familiar with the situation, ofo’s so-called “dark moment” seems to refer to acquisition negotiation between ofo and Didi Chuxing, the Chinese car-hailing company that recently found itself in some sticky situations as well.
According to one source, Dai had communicated with Didi Chuxing CEO Cheng Wei on a potential takeover offer two weeks ago, but Dai explicitly told Cheng that he would never to give up.
ofo and Didi Chuxing both declined to comment on the matter.
Dai told the staff who attended the Monday meeting that if they did not want to fight, they could choose to leave the company. He said in the future, ofo would remain independent, and that the five founders of ofo would retain a seat on the nine-person board of directors.
Like their rival Mobike, ofo’s had been operating at a loss, implying ofo needs continuous injections of new capital to maintain its operations. In addition, there is a growing pressure on the entire bike-sharing industry. A dozen of cities, including Beijing, Shanghai and Shenzhen, has banned the placement of more new bicycles into the cit.
Dai told employees at the internal meeting that, although the current situation is tough, it is far from the “darkest hour” in his life. His biggest obstacle was when he tackled the challenges in bike-sharing business when the company was just founded. Ofo was founded in 2015, and now it has more than 2,000 employees with a valuation of about $3 billion.
According to people familiar with the matter, Dai also launched a project codenamed “Victory” at the same internal meeting on Monday, with the goal of making ofo’s profits reach at least 1 yuan ($0.16). The plan borrows Winston Churchill’s iconic “V” gesture, which stands for victory.
How to remain independent in the giant-dominated technology industry is a common problem for Chinese tech start-ups.
According to a report released in February by the Chinese information service provider ITjuzi.com, 50.8% of China’s 124 unicorns are controlled or supported by Baidu, Alibaba and Tencent.