Apr 26, 2021 07:30 PM

Hello Inc. Becomes First Major Chinese Bike-Sharing Player to Seek IPO

The company said that it has been subject to intense regulatory scrutiny from the state and municipal regulatory authorities in China. Photo: VCG
The company said that it has been subject to intense regulatory scrutiny from the state and municipal regulatory authorities in China. Photo: VCG

Chinese bike-sharing startup Hello Inc. has become the first major company in its class to launch an initial public offering, betting investors will buy into its growth story even as it continues reporting large but progressively shrinking losses.

Hello, backed by fintech giant Ant Group Co. Ltd., on Friday submitted its prospectus to the U.S. Securities and Exchange Commission for a proposed Nasdaq IPO with an initial fundraising target of $100 million, although that figure often goes up or down depending on investor demand. It did not say how it might use the proceeds.

Hello’s IPO plan comes as it disclosed narrowing losses over the past three years. It booked a net loss of 1.1 billion yuan ($173.7 million) in 2020 down from a loss of 1.5 billion yuan in 2019 and 2.2 billion yuan in 2018, according to its prospectus filing.

Founded in 2014, Hello’s main business centers around shared two-wheeler services and, more recently, a modest carpooling business. It facilitated 5.1 billion bike and e-bike rides in 2020, and it generated 91% of its revenue from shared two-wheeler services last year, it said in the filing.

However, risks remain in Hello’s local services as they are “highly regulated.”

If the Chinese government adopts or amends new rules, “our business, results of operations and financial condition could be materially and adversely affected,” Hello said in the prospectus.

The company said that it has been subject to intense regulatory scrutiny from the state and municipal regulatory authorities in China. In August 2017, the Ministry of Transport issued the first national guidelines for regulating bike-sharing services, and some cities have passed local rules to regulate the development and operation of shared two-wheeler services, according to the prospectus.

“Compliance with existing rules and regulations and any new rules and regulations that may be adopted in the future may increase our compliance cost and restrict the expansion of our shared two-wheeler services,” Hello said.

Currently, Ant Group, holds a 36.3% stake in Hello through a subsidiary. Yang Lei, founder of Hello, holds 10.4%, and Shanghai-listed Youon Technology Co. Ltd. (603776.SH) owns 7% of Hello, according to the filing.

In October 2017, Youon Bike signed an agreement to combine its bike-sharing unit with Hello, which was known as Hellobike at the time, and later in December 2017, Ant Group poured investment into Hellobike and became its largest shareholder.

Earlier this month, Hello launched three smart electric bikes, joining the world’s largest market for two-wheeled electric vehicles. “While providing bike-sharing service, we found two-wheeled electric vehicles are the most popular means of transportation for Chinese people,” Li Kaizhu, co-founder of Hello, said then.

Hello is one of the few companies to survive China’s bike-sharing bubble, which resulted in vast “bicycle graveyards” of abandoned bikes in many cities. For example, Mobike, a top player in the bike-sharing sector, has changed its name to Meituan Bike after Chinese lifestyle service and food delivery giant Meituan acquired it for $2.7 billion in April 2018. Meituan Bike’s services are now only available on Meituan’s platforms.

Ofo, which like Hello, was founded in 2014 and also received heavy financial backing from an Alibaba subsidiary, rose to be valued as much as $3 billion at its peak before nearly ending up in bankruptcy in 2019.

Ride-hailing giant Didi Chuxing’s nascent bike-sharing arm Qingju, which started operation in 2018, last year concluded a billion-dollar funding round with $850 million coming from Didi itself and $150 million from venture capital firm Legend Capital and Softbank. 

In 2020, Hello recorded 6 billion yuan in revenue, up 25.3% year-on-year, as it said in the prospectus that it has gradually recovered from the impact of the Covid-19 epidemic in the second half of last year. Cycling returned to favor in China as people avoided public transport at the height of the pandemic last year.

Contact reporter Timmy Shen ( and editor Michael Bellart (

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