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By Tianyu M. Fang / Jul 04, 2019 05:42 PM / Business & Tech

Photo: VCG

Photo: VCG

Before bike-sharing companies began declaring bankruptcy one by one, Xiaoming was one of the names blazoned on colorful bikes dotting the streets of Chinese cities. Now, the startup is deep in debt — 45 million yuan ($6.5 million) deep, to be exact.

Out of this, unpaid user deposits account for 25 million yuan, according to the startup, which revealed what it owes to creditors in a statement this week.

Founded in 2016, Xiaoming officially declared bankruptcy in July 2018, after its users noticed that they could not get their deposits back. The Guangdong Consumer Council filed a public interest lawsuit against Xiaoming in December 2017 — the first against an internet bike rental firm. At its peak, the company had over 430,000 bikes across China.

Xiaoming is only one of the many sinking bike-sharing startups. In December, a Chinese court ordered the blacklisting of Dai Wei — the founder of Ofo, a firm once valued at over $2 billion — limiting his personal expenses as the company struggled to repay massive debts. Dai has been barred from leaving the country since June.

Ofo has said on its official Twitter account that “everyone is getting their money back” — but the tweet was posted on April Fool’s Day.

Related: Bike-Sharing Woes Put Skids on Suppliers’ Earnings

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