The exclusive franchise holder of % Arabica in Greater China, Lucky Ace International, is eyeing raising about US$300 million to fund expansion, Bloomberg reports. 

The company is reported to have reached out to potential investors for the new funding round, which is expected to bring the franchisee’s value to US$1.2 billion. The company was estimated to value at about US$800-900 million in its last funding round, the source told Bloomberg. 

Entering Greater China in 2017 with the launch of two Hong Kong stores before expanding into Shanghai the following year, the Japanese coffee chain currently has 61 stores across the region. 

The source said the proposed funding size and valuation could still change. 

The fund is expected to help Lucky Ace International increase % Arabica’s footprint in the region, ramping up its expansion in the booming coffee retailing market dominated by Starbucks and Luckin Coffee. Earlier this year, US coffee chain Blue Bottle Coffee made its Mainland China debut with a first store in Shanghai. 

According to a study from Mordor Intelligence, China’s coffee market is projected to experience a CAGR of 10.42 per cent from this year to 2027.