Ofo, the Chinese bicycle-sharing unicorn backed by Alibaba, has decided to exit India just seven months after launching its services in the country, a person with direct knowledge of the matter told TechCircle.
The company will hand out pink slips to its entire 40-strong India team, the above-mentioned person said on the condition of anonymity.
Operations will shut down imminently with a formal exit in terms of physical presence expected to take a couple of months, the person added.
“These things happen with multinational corporations and has nothing to do with India,” the person said. “There are more mature markets globally where running such ventures make more sense.”
A local Ofo representative told TechCircle that the company was re-prioritising its operations in international markets.
“Ofo has a positive experience in India. Our global strategy has shifted to bring more focus on select international markets,” said Rajarshi Rakesh Sahai, director of public policy, government relations & communications at Ofo.
Ofo had set up operations in seven cities in India after foraying into the country last December. It had wound up its Coimbatore operations last month but is still functional in Indore, Delhi, Ahmedabad, Chennai, Pune and Bengaluru, Sahai added.
In April, Ofo said that it had completed 1.1 million rides in the country.
Ofo’s plan to exit India was first reported by Chinese-based portal Technode. Separately, there have been reports that Ofo is planning to pull out of Australia and Israel.
Founded in 2014 by Dai Wai and Yu Xin, Ofo is operational in at least a dozen countries, including China, the US, Singapore, Japan and the UK. It has so far raised close to $1.3 billion from the likes of Alibaba, Xiaomi and Didi Chuxing.
Media reports in China say Ofo has been facing a cash crunch in recent months and plans to lay off around of half of its staff at its headquarters.
Chief operating officer Zhang Yanqi, who was directly overseeing the company’s overseas divisions, is also said to have parted ways with the company.
However, Ofo has dismissed these reports as speculation.
The move to quit India comes two months after Mobike, Ofo’s biggest rival in its home market of China, said it would launch services here.
Mobike was acquired by Chinese food-to-flight services major Meituan Dianping for an estimated $2.7 billion in April this year. The company’s backers include Tencent, Temasek and Sequoia Capital, among others.
A few other high-profile names have diversified into bike-sharing of late.
Around the same time, InMobi co-founder Amit Gupta, also launched a bicycle- sharing startup called Yulu.