Chinese startup Luckin Coffee’s valuation doubles to US$2.2 billion

Luckin is the unicorn threatening Starbucks’ global coffee stronghold (Bloomberg pic)

BEIJING/SHANGHAI: Luckin Coffee, an up-and-coming coffee chain with ambitions to challenge Starbucks Corp in China, said on Wednesday it has raised $200 million in its latest funding round, increasing the company’s valuation to $2.2 billion.

The fundraising was led by investors including Singapore sovereign wealth fund GIC and China International Capital Corp Ltd, Luckin said in a statement.

Reuters had reported in November that the coffee chain was targeting a valuation of US$1.5 billion to US$2 billion in a new round of funding and was in early-stage talks with investment banks about an overseas initial public offering.

The firm’s supercharged growth plan has been built on cheap delivery, online ordering and big discounts, making it a thorn in the side of larger US chain Starbucks.

In July, Luckin raised US$200 million from investors including GIC, bringing its valuation to US$1 billion. That made it one of the fastest firms in China to reach unicorn status.

Luckin said in its press release that by the end of November it had over 1,700 stores in 21 major cities around China. The firm, which only officially started operations in January, has been opening stores at breakneck speed.