Luckin Coffee, the loss-making Chinese coffee startup, registered RMB 45 million ($6.7 million) worth of movable assets as collateral to Zhongguancun Technology Lease Co., Ltd. (our translation), according to Chinese enterprise intelligence platform Qichacha.com.

Although it concerns relatively small sum, the move signals financial pressures, Zhuang Shuai, the founder of Beijing-based consulting firm Bailian, told TechNode. The startup aims to surpass US rival Starbucks in China store count this year. Starbucks has 3,600 outlets in China, according to the company.

Blitzscaling has worked for software companies but it remains to be seen whether it can work for physical assets, according to Michael Norris, strategy and research manager at AgencyChina in Shanghai. He cites examples in bike rental and co-working sectors to illustrate the level of investment required to build enormous scale very quickly across physical assets. “In a large number of cases, it’s more money than most investors can handle,” Norris told TechNode in a written response on Tuesday.

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Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.