Chinese startup Luckin Coffee becomes unicorn after raising $200mn to drive expansion
Chinese startup Luckin Coffee has raised $200mn in a funding round that gives it a $1bn valuation, making it one of the country’s first coffee shop unicorns.
The Beijing-based startup has opened 525 outlets across 13 of China’s major cities since it was launched less than nine months ago.
Investors included private equity firm Centurium Capital and GIC, Singapore’s sovereign wealth fund.
“The funds we raise will be used for product research, technology innovation and business development,” Luckin CEO Qian Zhiya told Reuters.
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Luckin Coffee has stores in 13 cities serving around 1.3mn customers, according to the company.
With five million cups of coffee sold in the four-month since its founding, Luckin Coffee has tapped into the so-called ‘new retail’ trend, through which tech giants like Alibaba or Tencent partner with retailers to provide mobile payments and analytics.
Through this approach, consumers can pay for their coffee using WeChat payments or Luckin’s “coffee wallet” - but not cash.
Today, around 44% of its 525 stores operate like “takeaway kitchens” according to the company.
Through this approach, coffee is delivered mainly by courier, using logistic service providers like SF Express.
Through the investment, the Chinese coffee startup hopes to take on its larger rival Starbucks, which currently has over 3,000 stores in the country.