Time Is Running Out for Unprofitable Chinese Startups

Time Is Running Out for Unprofitable Chinese Startups https://images.wsj.net/im-44657/social

Time Is Running Out for Unprofitable Chinese Startups






There is a joke in Silicon Valley that startups can have a booming business if they sell dollar bills for 90 cents—that is, until they run out of dollar bills. A bike-sharing crash in China shows the folly of taking such startups too seriously now that venture capital is drying up.

Ofo, one of China’s two leading bike-sharing companies, has run into cash-flow problems throughout the year, its founder, Dai Wei, admitted in a email to employees last week. Mr. Dai himself has been put on a government blacklist for unpaid bills,...

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