Luckin Coffee plans to increase over $ 500 million in US IPO – TechCrunch
Luckin Coffee, the ambitious Chinese start-up that goes after Starbucks, could raise nearly $ 600 million from the upcoming IPO. It is according to a price range released by Chinese startup.
In a new filing, Luckin said it plans to sell 30 million shares in an introductory area of $ 15- $ 17, giving an estimated $ 450 million increase to $ 510 million, but it may be bumped up if warranties take up further allocation of 4.5 million shares. So, as a total total, the listing can increase $ 586.5 million if the entire offer is bought at the top of the series.
The company will list on Nasdaq as & # 39; LK. & # 39;
Luckin filed to become public last month, just weeks after closing a $ 1[ads1]50 million B + finance round led by New York Private Equity Blackrock, which has a 6.58 percent stake in Starbucks. The deal valued Luckin at $ 2.9 billion, and it took the three-year company to $ 550 million from investors to date.
The company has burned itself through incredible amounts of money as it attempts to quickly build a brand that can compete with Starbucks, and the presence that the US firm has built over the last 20 years in China. Through aggressive campaigns and coupons, the company had a $ 475 million loss in 2018, the only all-year-round business day, with $ 125 million in revenue. In the first quarter of 2019, it cut a $ 85 million loss with a total sales of $ 71 million.
Starbucks CEO Kevin Johnson has been reconciling the viability of this strategy of "heavy, heavy discounts."
"We invest capital and build 600 new stores a year. [We’re] generates the return on invested capital that we believe is sustainable to continue building new stores in this rate for many years to come," he told CNBC in a recent interview.
Starbucks claims 30,000 stores worldwide. It has been in China for 20 years and aims to reach 6,000 stores in the country by 2022. Luckin, powered by the VC money, has quickly scaled to reach 2,370 places in under two years with plans to add further 2500 this year. It will see that it takes over Starbucks – which has 3,600 stores across 150 Chinese cities – even though a metric gives a distorted view since Luckin specializes in digital orders and on-demand delivery. It is unlike the retail run by Starbucks.
