FRANKFURT (Reuters) - Bicycle-sharing start-up LimeBike will begin operating in two European cities this month, marking the first overseas expansion by U.S. players seeking to keep pace with the international forays of better-funded Chinese rivals.
LimeBike, which launched in January and operates in dozen U.S. cities and college campuses, is introducing its bikes-where-you-find-them operation in Frankfurt and Zurich and plans further European expansion in the spring, it said on Monday.
The Silicon Valley-based company aims to break in on an increasingly global craze that first exploded in China, where a handful of businesses have raised billions of dollars in funding in the past two to three years.
So-called dockless bike-sharing schemes allow riders who sign up on their smartphones to rent bikes using an app that helps them to locate cycles left by previous users.
The LimeBike scheme charges 1 euro or Swiss franc for a 30-minute ride. The company also offers monthly subscriptions for frequent users.
Distinguished by attention-grabbing colours, this new category of bike-sharing companies includes Chinese players Ofo (bright yellow) and Mobike (orange) and Singapore’s OBike (yellow and silver). In the United States, there is LimeBike (lime) and smaller rivals such as Spin (grey) and Jump (red), which offers electric-powered bikes.
The three Asian companies have made initial moves into Europe in recent months as part of broader international expansion across Asia, the United States and other markets.
Ofo has spread into six European nations from a 200-city base in China. Mobike, active in 160 Chinese cities, now competes in Britain, Italy and the Netherlands, while OBike is in eight countries from Sweden to Italy.
LimeBike has raised $62 million in funds from investors such as Andreesen Horowitz, an internet-focused venture capital firm, and New York-based hedge fund Coatue Management, backer of Uber, Lyft and Snap Inc (SNAP.N).
LimeBike said it is planning a fivefold increase in the number of bikes it makes available in its U.S. markets to 50,000 by month-end.
However, its funding is dwarfed by that of Ofo and Mobike. Ofo has raised nearly $1.3 billion since it was founded in 2014 and Mobike has raised $928 million since 2015, according to data from investor-tracking site Crunchbase. OBike has taken in a more modest $45 million since 2016.
Dockless bicycles contrast with the more formal bike-sharing programmes that grew up over the past decade and allow users to hire bikes from fixed racks, typically set up via rental deals with municipal governments.
For all the convenience and widespread availability of dockless bike-sharing, it has not been universally welcomed, however, drawing criticism in some areas for the eyesores that result when abandoned bikes pile up.
Reporting by Eric Auchard; Editing by David Goodman