Ant Financial Joins RMB 810 Mln Investment in Shared Bike Operator Youon Low Carbon
Youon Public Bicycle System, 9/19/17
Changzhou-based public bicycle sharing service operator Youon Public Bicycle System (603776.SH) recently announced that its wholly-owned dockless bicycle sharing subsidiary Jiangsu-based Youon Low Carbon Technology plans to add eight new investors including Ant Financial subsidiary Yunxin Venture Capital, Shenzhen Capital Group, and Lingji Enterprise Management Center. The new investors will contribute a total of RMB 810 mln in new funding, which will reduce Youon Public Bicycle System's stake in Youon Low Carbon to 38.17%. Youon Public Bicycle System will no longer be Youon Low Carbon's controlling shareholder after the transaction, and Youon Low Carbon will no longer be listed within Youon Public Bicycle System's consolidated financial reports. According to accounting regulations, the transaction will be listed as approximately RMB 504 mln in income to Youon Public Bicycle System in its 2017 consolidated financial report.
Following the investments, Youon Low Carbon's equity structure will be as follows:
Youon Low Carbon Shareholding After Transaction
| Shareholder | Investment (RMB/Mln) | Registered Capital Held (RMB/Mln) | Stake |
|---|---|---|---|
| Youon Public Bicycle System | 0 | 10.0 | 38.17% |
| Yunxin Venture Capital | 400 | 8.0 | 30.53% |
| Shenzhen Capital Group | 100 | 2.0 | 7.63% |
| Liyang Hongtu New Economy | 100 | 2.0 | 7.63% |
| Changzhou Tianrong Equity Investment | 100 | 2.0 | 7.63% |
| Changzhou Hetai Equity Investment | 50 | 1.0 | 3.82% |
| Changzhou Jiaheda Venture Capital | 40 | 0.8 | 3.05% |
| Shenzhen Yijiashun Electronics | 10 | 0.2 | 0.76% |
| Lingji Enterprise Management Center | 10 | 0.2 | 0.76% |
| TOTAL | 810 | 26.2 | 100% |
Youon Low Carbon was established on August 8, 2014. As of the end of July 2017, it had net assets of RMB -3.834 mln (consolidated). The company was previously valued at RMB 500 mln, and this valuation will increase to RMB 1.31 bln as a result of the current transaction. Most of Youon Low Carbon's valuation is based on its technology, intellectual property, brand, and user resource assets.
Youon Public Bicycle said that attracting new investors and significant new capital will help support the large amount of investment required at this stage of development for its dockless bicycle sharing service without risking a cash flow crunch or even short-term losses that could result if it had to shoulder all such investment on its own.
Ant Financial is the financial services affiliate of Chinese e-commerce conglomerate Alibaba Group (NYSE: BABA).
Editor's Note: Ant Financial is also a stakeholder in Youon Public Bicycle System (see Ant Financial Invests in Bike Sharing App Developer Youon Public Bicycle, MD 3/01/17 issue). Ant Financial and parent company Alibaba Group are also stakeholders in leading dockless bicycle sharing service and Youon rival Ofo (Bikelock Technology). For more background, please see Update: Alibaba Group Leads USD 700 Mln Funding in Bike-sharing Service Ofo, MD 7/06/17 issue, and Ant Financial Invests in Bike Share App Ofo, MD 4/24/17 issue.
Keywords: Youon Low Carbon Lingji Enterprise Management Center Liyang Hongtu New Economy Tianrong Equity Investment Hetai Equity Investment Jiaheda Yijiashun Electronics funding valuation wireless Shenzhen Capital Group Alibaba Group Yunxin Venture Capital BABA Youon bicycle sharing Youon Public Bicycle VC Ant Financial Group 603776.SH
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