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Bike-rental startup Mobike owned by lifestyle services company Meituan confirmed Monday that it is shutting down some of its Asia businesses, but denied that the closures are part of a larger exit strategy.
On Saturday, TechCrunch reported that Mobike had given notice to 15 full-time operations staff employed across Singapore, Malaysia, Thailand, India, and Australia, citing numerous sources. The move was also said to affect “many more” contract and third-party workers employed by Mobike’s businesses across the Asia-Pacific region. Two TechCrunch sources said the layoffs were part of a company plan to eventually shut down all of its foreign operations.
However, a Mobike representative told TechNode on Monday that the company currently has no plans to “adjust” businesses outside of Asia.
The company released a statement Monday that it would close only “some” of its Asia businesses while exploring other opportunities. It also stated that an effort to “optimize” its foreign operations would affect “over 10 local employees” in Asian countries. “At the same time we will continue to evaluate businesses in other countries and regions. Those that don’t meet operational efficiency standards will be shut down or operated through strategic partnerships.”
A Meituan spokesperson declined to comment for this article. The company acquired Mobike in April for $2.7 billion, and reportedly shouldered an additional $700 million in debt. The internet giant announced in January that it would rebrand Mobike as Meituan Bike and completely replace its standalone app with an in-platform service.
Mobike’s expansion into international markets began in 2017 during a red-hot rivalry with Alibaba-backed Ofo that contributed to cash flow problems for both. Meituan, by contrast, has mostly focused its efforts on China. In December, speculation also arose over Mobike potentially selling off its $100 million operations in Europe as it faced inquiries over breaching data laws there.
A source told the Financial Times that at the time, “Meituan has no international division of any shape or form and probably doesn’t want one, and when it acquired Mobike, it acquired the international arm.”
Additional reporting by Emma Lee.
