Luckin, a startup vowing to overthrow Starbucks’ Dominance in China announced Wednesday it raised its valuation to $ 2.2 billion after raising $ 200 million in a Series B funding round.
That came just five months after the newcomer coffee, which launched softly in January, raised $ 200 million in investment. Luckin has been spending at an open store and has burned as much as $ 150 million in the first six months of operation, its founder said in July, when the company had a cash reserve of 2 billion yuan, or about $ 290 million.
Luckin currently operates in the top 21 Chinese cities, with a total of more than 1,700 stores. For comparison, Starbucks’ footprint encompassed 3,300 stores in China as of May, though keep in mind that the Seattle coffee chain entered China nearly 20 years ago.
Unlike Starbucks, Luckin’s brick and mortar facilities are a combination of cafes and pickup booths, which double as delivery centers and take-out kitchens that are solely for delivery personnel to pick up caffeine-infused orders. and put them in the hands of customers within 30 minutes.
As a result, Luckin managed to build a dense network targeting office workers who might be drawn to the idea of coffee delivery because they can’t leave their desk. There is at least one Luckin location within a 500-meter radius anywhere in central Shanghai and Beijing, the company said.
The speed of light that Luckin has expanded at in less than a year probably took a toll on Starbucks, which joined Alibaba-owned Ele.me food distribution team in August to bring coffee to the door. from the people. The American company aims to expand its delivery services to 30 cities in China by the end of 2018.
Luckin co-founder and CEO Qian Zhiya, who was COO at one of China’s largest car rental firms, CAR Inc, said her startup will continue to invest in products, technology and business development to enhance the experience. of the user after the round.
Luckin raised fresh capital from existing investors. Singapore Sovereign Wealth Fund GIC. China International Capital Corporation, Joy Capital and Dazheng Capital, controlled by the Chinese government. Liu Erhai, founding partner and director of Joy Capital, joined Luckin’s board of directors after the close of the round. Liu’s investment portfolio includes Car Inc, Facebook’s former Chinese rival Renren and Hong Kong-listed game publisher iDreamsky.