TEHRAN, Apr 23 - Luckin Coffee Inc, the Chinese challenger to Starbucks Corp, filed on Monday for a U.S. initial public offering (IPO) through which, sources said, it is looking to raise up to $800 million.
TEHRAN, Young Journalists Club (YJC) -The Beijing-based coffee chain set a placeholder amount of $100 million to indicate the size of the IPO and did not disclose the number of shares it would offer, a filing bit.ly/2UtnC0g with the U.S. Securities and Exchange Commission showed.
Two people with direct knowledge of the matter told Reuters the startup is potentially looking to raise $500 million to $800 million from the listing which is scheduled to take place in May. An amount raised in that range would make Luckin the biggest U.S. IPO by a Chinese firm so far in 2019, according to Refinitiv data.
Another source said the loss-making company is aiming for a valuation of between $4 billion to $5 billion, a significant jump from $2.9 billion following its latest fundraising of $150 million that was announced last week.
Luckin Coffee, which has been expanding at breakneck speed, currently operates 2,370 stores in 28 Chinese cities and plans to open 2,500 new stores this year with the goal of displacing Starbucks as China’s largest coffee chain in the process.
The brand is banking on an increase in coffee consumption in China which, according to a report cited by Luckin in the prospectus, has almost doubled to 8.7 billion cups last year from 4.4 billion in 2013 and is expected to further rise to 15.5 billion cups by 2023.
However, the company is still loss making and has warned that it could continue to incur losses in the foreseeable future.
Since inception on June 16, 2017, the company has been in the red, with net loss to shareholders at $475.4 million last year, and total revenue of $125.27 million, according to the filing. For the first three months of this year, it posted a net loss of $85.3 million.
Source: Reuters
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