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1/n
@Hellobike_china have filed an S1 to go public on the NASDAQ - the largest micromobility company to list so far.
This really matters for the micromobility industry.
I've shared some key stats and context in the thread below.
@Hellobike_china have filed an S1 to go public on the NASDAQ - the largest micromobility company to list so far.
This really matters for the micromobility industry.
I've shared some key stats and context in the thread below.
2/n
in 2020, 4 billion rides, 1.1bn of which were electric mopeds. Booked $926m in revenue, COGS of $817m (88% of revenue) and a 2020 loss of $176m.
Operating in 400 cities, with ~110 million active users per quarter -> each user averages 40 riders per year
in 2020, 4 billion rides, 1.1bn of which were electric mopeds. Booked $926m in revenue, COGS of $817m (88% of revenue) and a 2020 loss of $176m.
Operating in 400 cities, with ~110 million active users per quarter -> each user averages 40 riders per year
3/n
(incredible loyalty for the MM space).
Hello have gone from an avg. rev ¥0.55 per ride in 2018 to ¥1.45 per ride in 2020. 266% over 3 years. How?
- removal of the heavy competition of Mobike + Ofo + others. Can increase prices.
- less subsidising ride as less competition
(incredible loyalty for the MM space).
Hello have gone from an avg. rev ¥0.55 per ride in 2018 to ¥1.45 per ride in 2020. 266% over 3 years. How?
- removal of the heavy competition of Mobike + Ofo + others. Can increase prices.
- less subsidising ride as less competition
4/n
- Hello originally focused on poorer per capita, 2nd and 3rd tier cities -> as these have continued to accrue wealth & Hello's moved into tier 1 cities, AOV has increased
- Hello can charge more for e-mopeds than for bikes.
E-mopeds have grown from 0 rides '18 to 1.1bn '20
- Hello originally focused on poorer per capita, 2nd and 3rd tier cities -> as these have continued to accrue wealth & Hello's moved into tier 1 cities, AOV has increased
- Hello can charge more for e-mopeds than for bikes.
E-mopeds have grown from 0 rides '18 to 1.1bn '20
5/n
Hello make 38% gross margin per single ride = $571m which makes up 62% of revenue.
Hello's margin per 'subscription ride' is -69% = $250m which makes up 38% of revenue.
This seems unsustainable. One imagines that subscriptions will have their prices increased.
Hello make 38% gross margin per single ride = $571m which makes up 62% of revenue.
Hello's margin per 'subscription ride' is -69% = $250m which makes up 38% of revenue.
This seems unsustainable. One imagines that subscriptions will have their prices increased.
6/n
Hello also operates a carpooling platform, which grew by ~100% in 2020.
$843m revenue from 2-wheels, $71m from carpool.
Hello have $126m in cash + IPO proceeds - touted at $100m). Should tie them over for 18 months but after this, with current ops, more capital needed.
Hello also operates a carpooling platform, which grew by ~100% in 2020.
$843m revenue from 2-wheels, $71m from carpool.
Hello have $126m in cash + IPO proceeds - touted at $100m). Should tie them over for 18 months but after this, with current ops, more capital needed.
7/n
Hello depreciate their bikes and e-bikes over 3 years.
Hello's last private valuation (March '21) was ~$3.5bn. A ~3.5x multiple on revenue.
If European micromobility companies were valued like this, they'd all be valued <€175m.
Hello depreciate their bikes and e-bikes over 3 years.
Hello's last private valuation (March '21) was ~$3.5bn. A ~3.5x multiple on revenue.
If European micromobility companies were valued like this, they'd all be valued <€175m.
8/n
@helbizofficial's proposed market cap of ~100x revenue means Hello should be worth $90bn - the magic $HLBZ multiple!
Investor Returns
- Ant Group own 36.3% (worth $1.27bn at last valuation).
- @GGVCapital Series A investors, own 6.1%. Led by Ji-Xun Foo, a 3.4x exit.
@helbizofficial's proposed market cap of ~100x revenue means Hello should be worth $90bn - the magic $HLBZ multiple!
Investor Returns
- Ant Group own 36.3% (worth $1.27bn at last valuation).
- @GGVCapital Series A investors, own 6.1%. Led by Ji-Xun Foo, a 3.4x exit.
9/n
Youan run docked bike-sharing in China + are listed on Shanghai Stock Exchange - own 7% of Hello.
(There may be a trading opportunity here - if you can find a retail platform that let's you trade the SSE - at writing, Youan's market cap is $690m with its Hello stake $245m)
Youan run docked bike-sharing in China + are listed on Shanghai Stock Exchange - own 7% of Hello.
(There may be a trading opportunity here - if you can find a retail platform that let's you trade the SSE - at writing, Youan's market cap is $690m with its Hello stake $245m)
10/n
Interesting Juncture
Hello is a combination akin to @vnvglobal's mobility investments in BlaBlaCar and Voi.
We've seen BlaBlaRide in France, could we see a merger of the two entities in the future to become the Hello of Europe? Per Brilioth - your move.
Interesting Juncture
Hello is a combination akin to @vnvglobal's mobility investments in BlaBlaCar and Voi.
We've seen BlaBlaRide in France, could we see a merger of the two entities in the future to become the Hello of Europe? Per Brilioth - your move.
11/n
The Founder
Lei Yang, 32. Prev. founded Shanghai Bida (2012-2015) a premium Uber/Didi competitor and then Shanghai Jingyao (2015-2018), a valet parking platform - before transitioning this to Hello Bike in November 2018.
Much of the exec team worked for Lei at Jingyao
The Founder
Lei Yang, 32. Prev. founded Shanghai Bida (2012-2015) a premium Uber/Didi competitor and then Shanghai Jingyao (2015-2018), a valet parking platform - before transitioning this to Hello Bike in November 2018.
Much of the exec team worked for Lei at Jingyao
12/n
Lei Yang owns 10.4% of Hello; at last valuation that's a stake worth $364m.
Lei's shares carry 20:1 voting power to common stock :/
Importantly, Lei will receive a performance bonus of $700m in stock if he can take $HELO to a $30bn market cap.
Lei Yang owns 10.4% of Hello; at last valuation that's a stake worth $364m.
Lei's shares carry 20:1 voting power to common stock :/
Importantly, Lei will receive a performance bonus of $700m in stock if he can take $HELO to a $30bn market cap.
13/n
Lei Yang is also CEO of Ningde Zhixiang -> a joint venture between Hello, Ant Financial and Contemporary Amperex Technology (CATL - an li-ion battery manufacturer on Shenzhen Stock Exchange at $130bn !)
formed to create a battery-as-a-service system across China
Lei Yang is also CEO of Ningde Zhixiang -> a joint venture between Hello, Ant Financial and Contemporary Amperex Technology (CATL - an li-ion battery manufacturer on Shenzhen Stock Exchange at $130bn !)
formed to create a battery-as-a-service system across China
14/n
...like Gogoro's success in Taiwan and similar to what Tier are trying to build in Europe.
Currently at 3424 battery swapping stations.
...like Gogoro's success in Taiwan and similar to what Tier are trying to build in Europe.
Currently at 3424 battery swapping stations.
15/n
The Route to IPO
Hello emerged relatively unscathed from the bike wars of '16-18 by avoiding the bloodbaths of Beijing & Guangzhou -> focusing on tier 3 cities like Nanyang & Jilin
Enabled Hello to focus on their operating model & value prop, whilst riding the tailwind
The Route to IPO
Hello emerged relatively unscathed from the bike wars of '16-18 by avoiding the bloodbaths of Beijing & Guangzhou -> focusing on tier 3 cities like Nanyang & Jilin
Enabled Hello to focus on their operating model & value prop, whilst riding the tailwind
16/n
of mass consumer adoption of dockless bikes as subsidised and marketed by Ofo (backed by Alibaba & Didi) and MoBike (backed by Tencent).
Hello then headed upstream to the tier 1 & 2 Chinese cities in 2018, which by now were less saturated by yellow and orange trim bikes.
of mass consumer adoption of dockless bikes as subsidised and marketed by Ofo (backed by Alibaba & Didi) and MoBike (backed by Tencent).
Hello then headed upstream to the tier 1 & 2 Chinese cities in 2018, which by now were less saturated by yellow and orange trim bikes.
17/n
The Competitors
MoBike - bought by Meituan for $2.8bn in 2018 (Meituan just raised $10bn at drop of a hat, valued at $220bn). Potential anti-comp charges looming.
Qingju - sort of part of/spun out from Didi ($850m invested) also backed by Softbank ($150m)
Ofo - dead.
The Competitors
MoBike - bought by Meituan for $2.8bn in 2018 (Meituan just raised $10bn at drop of a hat, valued at $220bn). Potential anti-comp charges looming.
Qingju - sort of part of/spun out from Didi ($850m invested) also backed by Softbank ($150m)
Ofo - dead.
18/n
The Future
You see the spheres of influence which each bike-sharing co. exists in - they're tied into these customer ecosystems and much of the dynamic in the Chinese micromobility market will depend on this.
Hello - Alibaba/Ant
MoBike - Meituan, Tencent
Qingju - Didi
The Future
You see the spheres of influence which each bike-sharing co. exists in - they're tied into these customer ecosystems and much of the dynamic in the Chinese micromobility market will depend on this.
Hello - Alibaba/Ant
MoBike - Meituan, Tencent
Qingju - Didi
19/n
110 million quarterly active users, of an estimated urban pop. of 843m means Hello have reached ~1/8 of TAM
Didi last publicly reported 111 million monthly active users
Meituan are a different beast at 510 million quarterly users
Some growth to look forward to.
110 million quarterly active users, of an estimated urban pop. of 843m means Hello have reached ~1/8 of TAM
Didi last publicly reported 111 million monthly active users
Meituan are a different beast at 510 million quarterly users
Some growth to look forward to.
20/n
1.2k of Hello's total 4.5k employees (26.7%) are accounted for as "R&D" which may yield exciting results - there's certainly opportunity to develop many more urban vehicle forms and differentiated services over the next 10 years.
1.2k of Hello's total 4.5k employees (26.7%) are accounted for as "R&D" which may yield exciting results - there's certainly opportunity to develop many more urban vehicle forms and differentiated services over the next 10 years.
21/n
Hello operate in ~400 Chinese cities, and one imagines that there are few opportunities to add more supply domestically - perhaps it's time to reconsider international expansion?
& perhaps through M&A activity this time?
Hello operate in ~400 Chinese cities, and one imagines that there are few opportunities to add more supply domestically - perhaps it's time to reconsider international expansion?
& perhaps through M&A activity this time?
22/n
Perhaps room to grow Hello's carpooling and could add neighbouring international markets (although regulatory unease in China)
Hello will benefit from the macro trends continuing to deepen urban Chinese pockets
Likely another 100m added to urban population in next 7-10 yr
Perhaps room to grow Hello's carpooling and could add neighbouring international markets (although regulatory unease in China)
Hello will benefit from the macro trends continuing to deepen urban Chinese pockets
Likely another 100m added to urban population in next 7-10 yr
23/n
No implied path to profitability painted in the S1 & the statement "we have incurred significant losses since inception which may continue in the future" is oft-repeated
bike wars are heating up again in
& Hello's future in "hotel booking" & "mobile groceries" sound meh
No implied path to profitability painted in the S1 & the statement "we have incurred significant losses since inception which may continue in the future" is oft-repeated
bike wars are heating up again in
& Hello's future in "hotel booking" & "mobile groceries" sound meh
24/n
Perhaps a Chinese economic downturn and/or environmental intervention to further limit the number of ICE vehicles in urban areas are what's required to continue to grow Hello.
Perhaps a Chinese economic downturn and/or environmental intervention to further limit the number of ICE vehicles in urban areas are what's required to continue to grow Hello.
25/n
IMO the Alibaba<>Tencent/Meituan<>Didi dynamic will be key and Alibaba clearly have the least momentum at the moment.
If Hello's battery-as-a-service plans can deliver the COGS savings hoped for, perhaps that's Lei's ticket to his $30bn payday.
IMO the Alibaba<>Tencent/Meituan<>Didi dynamic will be key and Alibaba clearly have the least momentum at the moment.
If Hello's battery-as-a-service plans can deliver the COGS savings hoped for, perhaps that's Lei's ticket to his $30bn payday.
You can read through the S1 here;
https://www.sec.gov/Archives/edgar/data/1841944/000104746921001022/a2243152zf-1.htm
Keen to hear alternative thoughts !
https://www.sec.gov/Archives/edgar/data/1841944/000104746921001022/a2243152zf-1.htm
Keen to hear alternative thoughts !
