Chinese bike-sharing startup Ofo now says it is worth more than $2 billion.
CEO Dai Wei, a 26-year-old entrepreneur who named his firm Ofo as the letters look like a bike, revealed that figure in a conversation with CNBC. It's about double the last reports of the company's value — which came out less than two months ago.
Such a valuation isn't too shabby for a company that started about two years ago with its founders pooling private savings of 150,000 yuan ($21,800) to kick things off.
Dai, for his part, is unfussed about the value of his Beijing-based firm. He even seems unaware of how astonishing it is to reach that figure for a firm that's so young. What's important to him, he said, is what Ofo can do for consumers.
"When you set up a company, you have to solve the problem, you provide [a] service for the users," Dai told CNBC. "We have to figure out … what is the main problem we have to solve — that is more important than valuation."
The sky's the limit for Ofo: Over 3 million of the company's bright yellow bikes can be found in more than 50 Chinese cities, and their wheels have already rolled abroad to London and Singapore. By year's end, Ofo is targeting expansion to 20 countries, including Japan, Spain, France, Germany and the Philippines, Dai said.
"We think 'bicycle' is the global language," Dai said, pointing out that most of the world's population can ride a bike.
Ofo's dizzying rise is a testament to the giant bike-sharing battle that has suddenly unfurled through China's busy urban streets. Cities are now dotted with a rainbow of bikes, each color representing a different company. But as more firms crop up to help residents manage the sprawl and the traffic, the big question remains: When, and will, they ever be profitable? And how are they going to do that with bike rides that cost a couple of cents per whirl?
"The business model is a bit puzzling … It's very capital intensive, and they've got to maintain the bicycles," said Paul Gillis, a professor and co-director at Peking University's Guanghua School of Management. "With these low fares, I can't see how they could possibly be earning a positive cash flow at this point."