Leadership & Strategy
Chinese Starbucks challenger Luckin Coffee targets US$2bn valuation
May 20, 2020
Chinese coffee company Luckin Coffee is seeking to reach a valuation of US$2bn in its latest round of funding, Reuters reported on 6 November
The ambitious Starbucks challenger launched in January this year and has already amassed a remarkable network of 1,400 stores across 21 Chinese cities.
By comparison, Starbucks has around 3,400 stores around the country, with China being its second-largest market after its native United States.
The American coffee giant announced in May that it is aiming to have opened 6,000 stores in China by 2022 to capitalize on its strong market position.
Reuters attributed Luckin’s explosive growth to the company’s tech startup-esque business model which places focus on affordable delivery and an online ordering platform alongside an aggressive marketing campaign.
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According to Reuters’ unnamed sources, discussions with investors are geared towards raising between $200mn and $300mn in fresh funds.
Luckin achieved unicorn status in July following a $200mn investment round that brought its valuation to $1bn.
Reuters’ sources added that Luckin is also in talks for the prospective launch of an international IPO, with New York and Hong Kong being the most likely candidates.
Starbucks entered a strategic partnership with ecommerce behemoth Alibaba in May this year, while Luckin entered its own alliance with Alibaba rival and tech conglomerate Tencent in June.
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