Chinese coffee chain upstart Luckin Coffee has raised $150 million in a Series B+, following a $200 million Series B in December, according to an announcement from the company. The funding was raised at a valuation of $2.9 billion, up from $2.2 billion valuation in December.

Of the total amount, a private equity arm of US investment and management cooperation BlackRock contributed $125 million. The investor behind the remaining sum was unspecified.

The two-year-old Starbucks challenger has been an investor darling since its inception. The current $350 million round follows a $200 million Series A that closed in June.

A Luckin representative declined to comment to TechNode on details about how the new funding will be used. The sum received in December was allocated to assist the company with further lowering delivery times, which are already within half an hour of customer orders.

Luckin’s access to capital has been an important driver for the company which has achieved breakneck growth through a model relying heavily on giving out freebies, building an expansive network of stores, and launching high-profile marketing campaigns against rivals that include Starbucks.

Despite the growth, the Chinese coffee firm is not on solid financial footing. It was RMB 857 million ($128 million) in the red for the first nine months of 2018, according to a business plan reportedly written for the company’s Series B and obtained by Chinese media outlet QDaily.

However, Luckin says its strategy of offering deep discounts will continue in the near future. Yang Fei, the company co-founder and CMO told Chinese media that a net loss of around RMB 800 million is within their expectation and the company will continue to offer discounts for the next three to five years.

The company’s massive losses cast a shadow over its sustainability, coupled with new signs signaling potential cash flow pressures and rumors about the company chairman tapping banks for a personal loan in exchange for IPO mandates.

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via or Twitter.

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