Building and scaling startups are a time taking process and require unflinching focus, consistent efforts, capital, solid team and many other qualities. Amongst all these, patience and perseverance hailed as a mantra for weaving success story in the domain. Entrepreneurship is a fun-filled as well as a painful ride that lasts for many years (anywhere between 5 to 10 years).
While it takes about a decade or more for startups, which go public, only a handful of startups fetch multi billion acquisition deal in early operating stage.
It’s rare but real, the two and half years old bike sharing startup Mobike has been acquired by Meituan-Dianping for about $2.7 billion.
Started in August 2015, Mobike is a Chinese bike sharing app with operations in about 180 cities in countries including US and India. It claims to have a fleet of over 7 million bikes and commands over 70 per cent marketshare in bike sharing space in China.
But, why are we highlighting Mobike acquisition?
Because, it’s probably one of a few startups globally that has scaled-up really fast and also consolidated at decent 1.7X return in just 30 months. While we don’t know the cash and stock components involved in the deal, it looks like a decent exit for founders as well as its major backer – Tencent.
Tencent had invested over $600 million in the Beijing-headquartered bike-sharing startup. Importantly, it’s also an investor in Meituan-Dianping and widely believed to have driven this deal.
Known for food delivery business, Meituan-Dianping does a lot more than food delivery. It offers many hyperlocal services such as housekeeping including air tickets, hotels, hyperlocal deals amongst many others.
Besides Mobike acquisition, SEA-focused online marketplace Lazada has brought fortune to founders and financiers including Rocket Internet, Singaporean sovereign fund Temasek. Alibaba had bought shares of aforementioned investors worth in tune of a billion USD. It invested $2 billion across two rounds in Lazada.
Such acquisitions are still far in Indian ecosystem as major consolidations in China and US are driven by cas rich groups like Alibaba, Tencent and Amazon. For instance, Amazon had acquired offline grocery major Whole Foods for whopping $13.7 billion.
Indian Internet behemoths such as Flipkart, Ola, Paytm and others have yet to turn profitable and become large entities with sufficient liquidity to think about expansion out of their forte. But, certainly, after five-seven years from now, some companies will also emerge from India with similar stature (Like Amazon, Alibaba, Tencent etc.)
The lesson for Indian startups from Mobike story
Pick a large pain-points of masses and solve them. Try to create a moat and raise a lot of capital to keep competition at bay.
And, last but not the least master the art of storytelling. It matters.
However, for a majority of entrepreneurs including us – don’t sway away from such stories and keep rocking everyday. Let’s your product do the talking.
Entrepreneurship is indeed a long haul game. Stay focused and keep reading!