Fast-growing Chinese coffee chain Luckin Coffee is seeking a new round of funding which would value it at US$1.5–2 billion.
Launched only this year, the company has already opened more than 1400 outlets in 21 mainland locations, its rapid growth based on its inexpensive delivery service concept and online ordering system. Luckin’s aggressive competitive strategy involves an IT-focused approach whereby all customers must purchase coffee via an app, with which they can then monitor brewing progress via livestream.
Its expansion has been backed by multiple investors, including Singapore’s GIC. It is currently seeking up to US$300 million in additional funding to continue its momentum.
Starbuck currently operates 3400 stores in China, which is its second-largest market worldwide. It intends to increase that number to 6000 stores within three years. The brand recently partnered with Alibaba to establish a coffee delivery service, foreshadowing Luckin’s own recently-signed partnership with Alibaba rival Tencent.
Some reports have suggested that Luckin may be in discussion with investment banks to launch an IPO overseas, most likely in either New York or Hong Kong.