Luckin Coffee, the Chinese start-up that aims to challenge Starbucks dominance in China, has filed for an initial public offering (IPO) in the US.
The Beijing-based company, which has applied to list on Nasdaq under the ticker LK, plans to raise $300m in the IPO, according to Bloomberg.
The filing comes one week after the company raised $150m in Series B funding which saw the company valued at $2.9bn, an increase on its $2.2bn valuation at the start of 2019.
Luckin Coffee, which launched in Beijing in January 2018, operates a digital model enabling customers to order via an app and then watch via live-streaming video as their coffee is made and delivered within 20 minutes.
This focus on technology, discounts and delivery has helped it grow rapidly, along with heavy discounting and special offers. Luckin currently operates 2,000 locations across China including pick-up stations, cafes and small preparation kitchens, and aims to open 4,500 outlets by the end of 2019. The move will make it China’s largest coffee chain in terms of stores.
Rival Starbucks currently dominates the China market with more than 50% market share, compared to Luckin’s 2.1% last year. Starbucks currently operates more than 3,600 stores in China and opens a new store every 15 hours. China continues to be the brand’s fastest growing market and it plans to boast 6,000 stores nationwide by 2023.
However, Luckin has already made an impact on Starbucks, which reported its first market decline – a 2% drop in sales in Q3 last year, although Starbucks dismissed the decrease as a short-lived challenge.