At present, the Chinese rival to Starbucks is planning to raise capital around $586.5 million through US security filing process. During the Initial Public Offering, a spokesperson of Luckin stated that the company will offer 34.5 million ADS. The price of American Depository Shares would be around $16 on an average.
Luckin Coffee has started to operate at a great speed. At present, it has more than 2300 stores which cover around 28 cities in China. The company also plans to open near about 2500 stores during the present year. The company is planning to displace Starbucks and gain high market share in China.
Luckin is focusing to increase coffee consumption in China. Last year, the overall coffee consumption in China was more than 8 billion cups. Analysts believe that by 2023 the figure would rise to 15.5 billion. Apart from selling the coffee the brand has also started to deal with other beverages and eateries viz. Jasmine tea, grapefruit, cheese, and Sichuan.
Luckin was founded back in 2017, and it is running under loss, spokesperson of the company has also stated that the Company would incur a loss in the upcoming future. The company has recorded a total loss of $475 million to shareholders. Moreover, it has also registered a loss of $85.3 million during the Q1 of 2019.
Luckin was founded by Qian Zhiya and two other executives. Qian Zhiya had worked as a COO at Cars and it was funded by a wealth fund of Singapore. Few other investors who play a role in the company are BlackRock, Joy Capital, and Centurium Capital.
One of the spokesperson has revealed that the company wants to be known by the symbol LK at the Nasdaq. At present, the four among the six underwriters for Initial Public Offering are Morgan Stanley, Haitong International, Credit Suisse, and CICC.