Shared-Economy Specialists UCar, Ofo Raise $1.1 Billion

(Beijing) — Two companies from China’s shared-economy sector announced a collective $1.12 billion in new funding, extending a 2-year-old money-raising frenzy from a group cashing in on a booming demand for new forms of urban transport.

The larger of the two fundings came for private-car-services specialist UCar, which announced it raised 4.6 billion yuan ($670 million) in a private placement from four investors, according to an announcement late on Tuesday. Not far behind was shared-bike specialist Ofo, which on Wednesday said it has raised its own $450 million in new funds.

UCar, which competes with industry leader Didi Chuxing, had announced in October its intent to raise 10 billion yuan through a private placement of about 196 million shares priced at 50 to 51 yuan apiece. But delays from its intended investors led the company to push back the plan until the latest deadline on February 28.

A spokesman for UCar, which is affiliated with Hong Kong-listed rental car company Car Inc., said a fifth investor is still planning to participate in the placement but hasn’t received necessary approvals.

Meantime, Ofo announced a new $450 million megafunding that is its fourth to date, and includes well-known Russian technology investor Digital Sky Technologies (DST). Other major investors include Didi Chuxing; a fund connected to financial conglomerate Citic Group; and venture investor Matrix Partners China.

Ofo competes with rival Mobike in the shared bicycle industry, which lets subscribers use company-branded bikes anywhere they can find them and then park them anywhere when they are done, paying a small fee based on distance traveled or time of use. Ofo said it has 51.2% of the market, citing third-party statistics. It had more than 1 million bicycles on the road at the middle of last year, and has detailed plans to extend its footprint outside China to the U.S., Britain and Singapore.

Contact reporter Yang Ge (geyang@caixin.com)