Possible Allocation of 10 Billion RMB in User Deposit by Bike-Sharing Platform ofo
On the morning of June 11, Caixin.com revealed that, ofo, the Beijing-based bike-sharing platform, has a 1.5 billion yuan ($234.2 million) deficit with only 3.5 billion yuan left in user deposit.
SEE ALSO: ofo in Deep Trouble? Co-founder Denies Rumored COO Resignation and Layoff
Last week, ofo was rumored to face a fierce personnel change including a COO resignation and a record layoff. According to analysis by business insiders, ofo has been in a shortage of operating fund. Currently, it is estimated that the amount of user deposit ofo has allocated could exceed 10 billion yuan. The number is derived from ofo’s 0.2 billion users who paid 99 yuan deposit each, excluding an estimated 30 million deposit-free users.
Ironically, China’s other bike-sharing giant Mobike Technology Co. just announced their deposit-free policy in hundreds of cities of China on the same day. The deposit-free policy has no specific requirements and does not any credit guarantees. Since May this year, Mobike has began to implement the deposit-free policy in cities like Hefei, Hangzhou and Dongguan. Today, it announced its expansion to many second and third-tier cities in China.
At present, ofo has not given an official response regarding this matter.