May 07, 2019 (China Knowledge) - China’s Luckin Coffee is now looking to raise USD 586.5 million through its US IPO according to a filing with the US Securities and Exchange Commission (SEC).
According to the filing, the company plans to sell 34.5 million American depository shares (ADS) priced at between USD 15 to USD 17.
Luckin Coffee which hopes to challenge Starbucks’ position as the largest coffee chain in China has been expanding rapidly since its founding. The company now operates 2,370 stores in 28 Chinese cities and is planning to open another 2,500 new stores this year.
Luckin is counting on a rise in coffee consumption in China to fuel its growth, with coffee consumption reaching 8.7 billion cups last year from 4.4 billion in 2013 and is expected to hit 15.5 billion cups by 2023.
Beyond coffee, the company has also since expanded to include food products and other beverages such as fruit juices to its offerings.
At the moment, the company is still operating in the red with a net loss of USD 85 million over the first three months of this year and is likely to continue making losses in the near future as it goes about its aggressive expansion.
Some of the company’s investors include BlackRock, Centurium Capital and Tencent Holdings.
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