Hello Inc becomes first Chinese bike rental firm to file for US IPO · TechNode Leave a comment


Hello Inc., the bike rental startup behind China’s ubiquitous blue HelloBikes, has submitted a prospectus to the US Securities and Exchange Commission in preparation for a Nasdaq IPO. This is a rare look into the economics of the bike-sharing industry, as it’s the first time a company in the sector has released extensive financial data.

Why it matters: Hello’s filing is a sign that the once-volatile bike rental industry is moving beyond its growth phase.

  • Hello and its competitors Qingju (an offshoot of Didi) and Meituan Bike survived the initial price wars and are shifting priorities from investment to profit.

READ MORE: The bike rental boom is dead. Long live bike rental

Details: The numbers in the filing reveal that Hello still has a ways to go to reach maturity.

  • The company has yet to turn a yearly profit. Nevertheless, its figures have been steadily improving, rising from a net loss of RMB 2.2 billion ($340 million) in 2018 to RMB 170 million in 2020.
  • The company’s revenue grew 25% to reach RMB 6 billion in 2020.
  • Hello hopes to raise $100 million in its Nasdaq debut.
  • The company has diversified beyond bike rental. Hello has added electric bikes to capture more of the market, and its ride-hailing platform has proven to be a strong competitor to market leader Didi

On track for profits? Industry experts weigh in.

  • “For me, the main surprises [from the company’s filing] were around HelloBike’s market share. On the basis of its figures, alongside research it commissioned, HelloBike is the world’s largest bike rental provider, China’s second-largest carpool platform, and the country’s third-largest local services platform,” Michael Norris, research and strategy manager at AgencyChina, told TechNode. 
  • Doug Young of the market research agency The Bamboo Works was less optimistic: “The company’s net loss attributable to ordinary shareholders ballooned by 50% last year to RMB 4.5 billion ($700 million) … Also, somewhat worrisome were figures for the company’s shared bike and electric scooter transaction volume, which is its core business and accounts for 91% of revenue. The prospectus showed revenue from that part of the service actually fell in every quarter of last year from the same quarter a year earlier, including a 6% drop in the fourth quarter.”
  • The company warns that it is not immune to Beijing’s recent crackdown on tech firms. Among the risks the company mentioned in its filing is the possibility of anti-monopoly claims. Hello’s main competitors Didi and Meituan have both been subject to fines from regulators in the last two months.

“HelloBike was a latecomer to the bike-sharing money wars. Its come-from-behind two-wheel leadership, as well as its growing carpool share, suggest the company is the beneficiary of savvy strategists and operators.”

—Michael Norris

Context: At its peak, 80 companies around China operated in the bike rental industry. But the sector soon became bloated and dozens of these firms went under.

  • The three remaining dominant bike rental players have survived in part because of deep-pocketed backers: Meituan Bike was formerly Mobike before being absorbed into lifestyle services giant Meituan, Hellobike’s largest shareholder is Alibaba’s Ant Group, and Qingju is of course under Didi.
  • Their success is also due to evolving market strategies, raising prices and expanding offerings to develop sustainable businesses.
  • Energy Monster, the leader in China’s power bank rental market, is another sharing economy representative that has recently IPO’d on Nasdaq.

Louis Hinnant is an intern at TechNode. He’s currently covering cleantech and mobility.

Christopher Udemans is a Shanghai-based data and graphics reporter. He covers Chinese artificial intelligence, mobility, and cybersecurity. You can contact him at chrisudemans [at] technode [dot] com.



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