It has urged its users to withdraw their deposits
The once trending yet controversial power bank rental sector in China has started to see small players opting out of the game. Hangzhou-based power bank rental startup LeDian announced on Wednesday that the company has shut down the business and retrieved all the devices.
The startup posted an announcement on its WeChat official account, stating that “the company has stopped the operation and urges users to withdraw deposits.” The company also advised that some users might experience failure withdrawing deposits due to server overload.
LeDian didn’t specify the reason why the company is shutting down its power bank rental business.
Lou Yingying, founder of LeDian’s parent company Tutubang (兔兔帮科技), said in April that “it is hard to merely rely on power bank rental business to make profits, let alone when more players are entering the market,” local media reported. She added that the cost of a small power bank rental station was around RMB 2000 to 3000 ($303 to $455). Starting in March, LeDian had placed about 200 stations in Hangzhou, covering public transportation stations, malls, karaokes, and hotels.
Despite LeDian’s failure, the top players in the sector appear to be growing steadily. Xiaodian last month announced a 195% growth in daily orders in August and now covers 70 cities in China. The cumulative number of users have exceeded 10 million people since April.
In fact, the investment carnival of power bank rental startups started in April, where five startups pocketed a combined RMB 300 million (US$ 43 million) financing in less than ten day with over 20 investment institutions dashing into the arena.
Hidian, on the other hand, seems to be out of juice as it has reassigned staff to far-flung border cities where the startup doesn’t really have registered offices in an attempt to push them out of the door, local media reported.
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