An Analyst’s Guide to Bursting Bubbles – China’s Bike-Sharing Market, and the Facts Behind the Figures

Using our i3 platform, we aim to cut through the noise and provide analysis on the trends that you’ve seen, and many that you haven’t. Our database is the cornerstone upon which we build much of our insight, using i3’s proprietary intelligence on over 24,000 companies to providing clear visibility on the underlying drivers and global trends that drive sustainable innovation.

We want to give an example of what this i3 data is telling us regarding one of the higher profile areas of current investment: bike-sharing. Are we witnessing a bubble ready to burst? Or does the market get what the market needs?

In 1Q17, bike-sharing investment has sky-rocketed, with the value of total investments in this quarter growing by 191% against pre-2017 investment figures ($295M pre-2017, compared to $858M in 1Q17). Despite a similar count of deals taking place in 1Q17 compared to pre-2017 (albeit in a very short space of time), this leap adds quantitative reinforcement to a well-worn anecdote in recent weeks – bike-sharing is hot stuff.

Another simple pass through the data will confirm the accompanying assumption – that this 1Q17 investment is focused primarily on China ($836M invested in Chinese companies compared to $255M in international companies).

But with i3, we can dig a little bit further into these bike-sharing companies and their investors, gaining an insight into not just where the money is flowing to, but also where it flows from.

Our data shows that participants in 1Q17 investment rounds have come primarily from corporations and venture capital firms, followed by private equity investors, and others (for example, angel investors, or merchant/investment banks).

As expected, China and the United States are home to the most active investors in this space, but the make-up of these investor bases warrants further inspection. Corporate investors have predominantly come from Asia, with five China-based corporations (six, including one from Taiwan) participating in bike-sharing deals. In contrast, venture capital has predominantly come from the United States, with six VCs from the US investing, compared to two from China.

But the billion dollar question (or rather the $1,153,118,879 question, according to i3), is so what? Although there has been considerable column space dedicated to bike-sharing and China, there are several factors that inhibit a full understanding of the significance behind these huge numbers.

The market may well be over-heated, or it may be evolving, as suggested by the participation of Ant Financial – which could signal a desire to capitalize on the bike-sharing customer base for revenue via mobile payments systems. The cultural differences that exist between Eastern and Western markets may dictate that the business model will work in some geographies (or even cities), whereas in others it may not. With Mobike’s expansion into Singapore, and plans for a US network, this theory may be put to the test sooner rather than later.

We can assure you, whatever the outcome, we will be at hand with in-depth analysis from our i3 data platform, via our QIM offering (which was sent this week to subscribers), our events (last call for Helsinki!) and our other content offerings.

What do you think? Do we have it right? Is the bubble going to burst? Want to know more about i3 and the content CTG creates? Let us know via comments below, or feel free to reach out via