Reports say that Bluegogo, China’s third largest bike sharing company, has closed and is totally bankrupt.
Bluegogo was founded in Nov 2016 by Li (Tony) Gang, who is also one of the co-founders of SpeedX Bikes.
The bike share brand had initially raised $90m USD of funding, but had burnt through the cash pile at an alarming rate, having also borrowed $40m USD from SpeedX Bikes.
At the time of writing (Oct 2017), Bluegogo has over 70,000 bicycles for hire in China.
The business was launched in Shenzhen and expanded into Guangzhou and Chenzdu.
Also opening in San Francisco early in 2017, but was forced to remove it’s bikes by the local city councillors. The reason given, was that the bikes were ‘littering’ the streets.
Bluegogo had also partnered with a Bike-Share company in Sydney (Australia).
Untrue media reports have said that Gang has fled the country, and that their Head Quarters is empty. This is true, and most of the staff have already left the company.
Other reports are saying that the employees have not been paid, and this has been confirmed in a letter from Li Gang, who said “I will try my best to solve it as soon as possible.”
None of the employees ever did get paid.
One of their Bike Suppliers, said that the company suspended all it’s orders in April 2017. “They could not raise any funds from investors” and continued by saying that “We have been entangled in (their) debts, which amounted to over $1.51m USD”.
Chinese Bike Brand SpeedX started up in Dec 2014, by selling a Strava-Style phone App., and went on to develop the SpeedForce (v1) ‘Smart’ stem that integrated with the App and was a replacement for standard bike stems.
The company started as the Beijing Beast Technology, later becoming Beast Bikes and eventually SpeedX.
The companies SpeedForce Bike Computer (v1) raised $450,000 on the crowding funding platform Indiegogo.
An off-road bike, the Mustang, followed shortly afterwards, which was limited to the Chinese domestic market.
In March 2016, SpeedX launched the Leopard / Leopard Pro smart bike, which became the most funded road bike project on Kickstarter with over $2.3m USD in pre-sales.
The Leopard frames was designed by international design consultancy Frog Design, and they were made by Fibertek of Xiamen, China.
The collapse of Bluegogo is sending ripples through China’s dockless bike-share sector. Many observers see the sector as a bubble about to burst, with the number of players likely to reduce as companies either run out of cash or merge. And that the number of bikes available will half.
It is estimated that there are currently 9 million bikes, available to rent on bike-share schemes in Beijing alone.
The demise of Bluegogo and the amount they ‘borrowed’ from SpeedX, had a profound affect on SpeedX, and was one of the main factors in its eventual collapse.