Fast-growing Chinese cafe chain Luckin Coffee has raised US$200 million in its latest funding round, effectively valuing the company at a stunning $2.2 billion. That’s up to $700 million more than its value was estimated just one month ago when the quest for funding was announced.
Launched only in January, the company had already opened more than 1700 outlets in 21 Mainland China cities by last month. Its rapid growth is based on an inexpensive delivery service concept and online ordering system.
An 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 pricing is considerably less than Starbucks.
Luckin said the latest funding round was led by Singapore Government sovereign wealth fund GIC and China International Capital Corp. They were likely attracted by a mid-term plan for an IPO of the Luckin business in either Hong Kong or New York. GIC was a participant in a similar capital raising in July.