Exclusive: Luckin Coffee Seeks Initial Public Offering in Hong Kong – Equal Ocean
What happened: Luckin Coffee is reportedly looking to go public on the Hong Kong Stock Exchange. According to anonymous sources cited by Equal Ocean, investment banks have begun to prepare listing materials for the company. Luckin, which began trial operations at the beginning of 2018, has become Starbuck’s top competitor in China.
Why it’s important: Despite the rumored IPO plans, Luckin racked up losses of around RMB 860 million ($130 million) during the first three quarters of 2018. The company is currently worth $2.2 billion following a $200 million round of funding in December. Luckin plans to increase subsidies for consumers in the next five years, while also opening new stores across the country, highlighting the crucial role of capital in its development. The company hopes to overtake Starbucks as China’s biggest coffee service, taking aim at opening more stores than the American coffee giant in 2019.