Chinese coffee chain Luckin, battling to dethrone Starbucks in the Asian giant, has raised $561 million ahead of its Wall Street listing, an IPO consulting firm said Thursday.

The Chinese company, which will debut on the Nasdaq Friday, set its share price at $17, at the high end of the range it announced in May.

It sold 33 million American depository receipts (ADRs) after initially marketing 30 million, said Renaissance Capital, which specializes in initial public offerings. The listing values the firm at more than $3.9 billion, according to Bloomberg.

ADRs allow foreign companies to list in America without being subject to strict rules that apply to US-based companies.

Luckin plans to use the funds to expand its network and lure new customers.

Since it was founded in 2017, the chain has built 2,370 stores in China as of March 31, focusing on offering customers quick grab-and-go service at its small stores or fast delivery to their homes and offices.

It uses a variety of coupons like free coffees and discounted cups to rope in customers and get them coming back to its stores.

The aggressive strategy mirrors tactics used by other Chinese startups that have dislodged Western brands from one of the world's top consumer markets.

The expansion and high marketing costs have seen its losses balloon in the 18 months it has been in business, racking up a loss of $241 million last year on $125 million in sales.

Luckin's caffeine-fuelled expansion has been funded by investors including Centurium Capital, a private equity fund founded by the former China head of Warburg Pincus, and Joy Capital.

Its founder Charles Zhengyao Lu earlier founded publicly-traded CAR Inc, one of China's largest car rental companies.

Luckin plans to open 2,500 stores this year and unseat Starbucks as China's largest coffee chain.

China is Starbucks' fastest-growing and second biggest market after the United States.

jc/dw/mtp

Starbucks

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

China's state media hits back at US on trade
Beijing (AFP) May 14, 2019
Beijing unleashed its tightly controlled media this week after keeping a lid on rhetoric for months as the trade war with Washington reignited, with fiery clips from state media ricocheting around the internet. The spree of editorials and commentaries in China's state media Monday and Tuesday ramped up attacks on Washington and its trade tactics, with Beijing rolling out the propaganda campaign in sync with its retaliation on US goods. China announced Monday it would raise tariffs on $60 billion ... read more