Alibaba (NASDAQ:$BABA) recently helped Chinese bike sharing operator Ofo to raise more than $700 million in funding. Other notable investors include CITIC Private Equity, Hony Capital, and Didi Chuxing—China’s equivalent of Uber.

Last year, Apple (NADAQ:$AAPL) invested around $1 billion in Didi Chuxing, and shortly after, Uber surrendered and sold its assets to the rival company.

Ofo

Bike-sharing is a fast-expanding business in China in lieu of national efforts to reduce air pollution and mitigate traffic congestion. Ofo customers pay a small fee to ride the company’s bikes through its official mobile app. Unsurprisingly, Ofo soon became China’s leading bike-sharing startup. The firm operates across 150 cities in China, and its fleet includes more than 6.5 million bikes. The plan is to reach 200 cities in 20 countries by the end of this year, increasing the fleet number to 20 million.

Revenue opportunity

It is speculated that China’s bike-sharing sector will be worth more than 29 billion yuan, or about $4.4 billion by 2021. Ofo’s main competitor is Beijing Mobike Technology and Younon. Alibaba’s hefty investment in Ofo brings in a diversified revenue stream in the time where e-commerce competition is tougher than ever, with the likes of Amazon (NASDAQ:$AMZN), eBay (NASDAQ:$EBAY), and JD.com (NASDAQ:$JD).

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