ofo mortgages four million bikes against $280 million of Alibaba money

Bike sharing giant Ofo has been given $280 million in two loans from affiliates of global trade giant Alibaba, according to reports in the far east.

Pledging four million of its bikes as a mortgage of sorts against the deal, some of Ofo’s main investors would not allow the business to take further direct investment from Alibaba, reports the China Money Network.

Alibaba previously led a $700 million financing round for the bike sharing business, something that has reportedly unsettled ofo’s shareholders, most notably 25% shareholder Didi Chuxing who blocked reportedly further investment.

It is believed that some of the four million bikes pledged against the deal are currently operating on the streets of Beijing, Shenzhen, Shanghai and Guangzhou.

Alibaba further became entwined with ofo by acquiring a $3 billion stake from GSR Ventures last month. Chinese media estimate this to represent around a 30% stake, some of which may have included shares held by Didi Chuxing, which is a GSR company.

UPDATE: CNBC is now reporting that a new funding round led by Alibaba Group Holding Ltd has generated $866 million for the business. That would represent the largest single funding round by a bike share business to date.

ofo is said to have around 200 million users globally, operating in 250 cities and 21 countries