What happened: Chinese coffee chain Luckin Coffee raised $561 million in its US initial public offering (IPO) on Nasdaq, pricing its share at $17 apiece at the top end of an indicative range of $15 to $17 per share, Reuters reported citing people familiar with the matter. The source added that the company sold 33 million American depositary shares in the IPO, more than the 30 million it originally planned. The pricing values the coffee chain at about $4.2 billion. A spokeswoman of the company declined to comment when contacted by TechNode on Friday.
Why it’s important: Luckin Coffee, which has built a customer base with smaller locations and more affordable prices, has made lots of headlines since it filing its IPO application last month. Characterized by breakneck expansion, Luckin is trying to overtake Starbucks as the biggest coffee chain in China with 2,370 stores open at the end of the first quarter with plans to add 2,500 this year. The company’s sustainability has been a topic of some debate because of its rapid, capital-fueled growth and widening losses. In 2018, the chain reported net sales of $125.3 million and a net loss of $241.3 million. Starbucks CEO Kevin Johnson has said the company’s rivals in China are focused on short-term gains, while Starbucks well-positioned for long-term growth.