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China has once again shown the world how it is done. The country which boosts of having the largest population on Earth has found a new trend being adopted by its citizens. The trend of renting bicycles has spread like wild fire and given birth to the country’s first unicorn bicycle rentals on-demand startup, Ofo.

China’s bicycle rentals on-demand space is flourishing at an unprecedented rate with the sector raking in investments worth more than $300 million this year alone — that too by just one company. And now comes the news that Beijing-based Ofo, which is popularly also referred to as the Uber for Bikes, has become the first player in the space to have reached the much-coveted $1 billion valuation, thus adding the title unicorn to its name.

The company behind the yellow two-wheelers that are nowadays seen everywhere in China has recently raised $450 million in its Series D round which was led by Russia’s DST.

The funding round saw a major onstage and offstage participation by China’s local car-hailing giant Didi Chuxing, the startup which is most famed for driving its arch rival, US-based taxi-hailing giant Uber out of the country. Not only has Didi itself invested in Ofo but it has also got some of its own investors like Matrix China and CITIC interested in the startup.

Ofo began its journey in the year 2014 as a student project at Beijing’s prestigious Peking University. Eventual PhD dropout Dai Wei and four other students had initially decided to explore cycle tourism but they finally decided to something around bike-sharing. It’s arch-rival Mobike was also started by Hu Weiwei, a former journalist around the same time.

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These startups aim to democratise access to rental bikes by leveraging the boon of technology. The bikes being provided by these startups come tagged with GPS chips which enable them to be easily rented out via a mobile app without having the need to be stored in a central location.

Mobike, which has raised capital from Tencent, Xiaomi, Sequoia China and Singaporean sovereign fund Temasek among others, started its year with a $215 million Series D round of its own in January. This was followed by a whopping $85 million in additional capital via strategic investments from Temasek and Foxconn.

It is interesting to note here that India, the country with the second largest population just behind China, has still not been able to capitalise the big potential that the space holds. Though there are many startups trying to make a mark in the space in the country, none has been able to achieve success on the same scale as China’s Ofo and Mobike.

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