The founder of ofo said that the company was under huge cash flow pressure, and even thought about dissolving the company and filing for bankruptcy, and said that he failed to make a correct judgment on the changes in the external environment.

The founder of Ofo, the Alibaba-backed bike-sharing service, said the company had huge cash flow problems and considered filing for bankruptcy.

Dockless bike-sharing companies, including ofo and its archrival Mobike, have deployed more than 20m bikes in China and overseas over the past two years.

Ofo, which operates dockless yellow cars, has raised more than US$2.2 billion since its establishment in 2014, representing a Chinese entrepreneurial model that achieves rapid growth through financing and burning cash.An industry insider estimated earlier this year that rival Mobike was burning $50 million a month, and Ofo was burning around $25 million.

However, ofo founder Dai Wei said in a letter to employees on Wednesday that the company is under huge cash flow pressure.

I have thought countless times...even to dissolve the company and file for bankruptcy. He said that the company has been under huge cash flow pressure throughout this year.To refund user deposits, pay suppliers’ arrears, and maintain the company’s operations, 1 yuan has to be broken into 3 yuan.

Millions of Chinese Ofo users have applied for their 99 yuan ($14) deposits to be refunded, and the company is trying to process refunds online.On Wednesday, when a reporter from the Financial Times applied for a refund of the deposit, there were more than 10 million users queuing online.

Dai Wei attributed the company's financial situation to the failure to make correct judgments on changes in the external environment from the end of last year to the beginning of this year.

The entire bike-sharing industry has weakened.Investors across the economy have become more cautious, said Bao Jun, an analyst at iResearch, a market research firm.

Food delivery giant Meituan bought Mobike in April, valuing Mobike at an enterprise value of about $3.7 billion.Another bike-sharing rival, Bluegogo, was pulled back from the brink of bankruptcy in January when it was acquired by car-sharing company Didi Chuxing for an undisclosed sum.According to reports, Didi was in talks to acquire ofo in August.

But Cui Ernan of Gavekal Dragonomics, a consulting firm, pointed out that ofo is currently having a hard time finding a company to save it.

Its shareholding structure is complicated, she said, and their investors include Alibaba and Didi, which is backed by Alibaba's rival Tencent... so no one is particularly supportive of them.

Ofo's US$866 million financing round in March this year was led by Alibaba, which has previously led many of ofo's financing rounds.Didi has also injected capital into ofo several times, and participated in a US$700 million financing round last year.

Ofo is also facing pressure from suppliers.In September, a bike maker sued the start-up for $10 million in unpaid payments.A bicycle lock maker has previously threatened to lock up 3 million bicycles due to a dispute over alleged unpaid debts.Ofo later said the dispute had been resolved.

In terms of overseas markets, ofo has reduced the size of its UK business, withdrawn from most cities, and laid off a large number of employees.Mobike is preparing to sell its European division for $100 million.

Additional reporting by Nian Liu in Beijing

Translator/He Li