Benzinga | Mar 10, 2021 03:04PM EST

Ant-Backed Bike Sharing Firm Hello Files For IPO: Bloomberg

Alibaba Group Holding Ltd's (NYSE:BABA) Ant Group-backed Chinese bike-sharing giant, Hello Inc, has privately filed for a U.S. IPO, Bloomberg reports.

What Happened: Hello recently started evaluating investor demand after submitting its filing in the U.S. The start-up teamed up with investment banking firms, including China International Capital Corp, Credit Suisse Group AG (NYSE: CS), and Morgan Stanley (NYSE: MS).

The company is yet to decide the size and valuation of the IPO. Hello reportedly intended to raise close to $1 billion, according to Bloomberg.

Why It Matters: The Shanghai-based start-up features amongst the fewest firms to survive China's bike-sharing bubble, which had attracted billions of dollars in investment at its height before going bust.

Hello succeeded in transforming itself into a one-stop transportation solution provider ranging from smart locks to AI-enabled traffic planning and car-pooling as one-time rivals like Ofo perished after incurring huge losses,

Founded in 2016, Hello is valued at $5 billion, backed by Primavera Capital Group, Fosun International Ltd., and GGV Capital. The start-up has over 400 million registered users with a presence in over 400 cities across China as of October.

Hello, faces severe competition from bigger rivals like Didi Chuxing Technology Co and Meituan (OTC: MPNGF) (OTC: MPNGY) (which acquired Mobike in 2018), which have struggled to turn into a profitable business. Recently, the companies have been expanding into electric bicycles following a boom in the EV market triggered by the higher push for cleaner energy. There were over 6 million shared e-bikes across China as of November. The global E-Bike market is estimated to be worth $70 billion by 2027.

Hello's potential debut comes within increased Chinese regulatory probing over the so-called sharing economy. In December, the Ministry of Transport summoned ride-hailing operators, including Hello, over illegal car-sharing services and safety risks.