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China's Luckin raises $561 mln as it hopes to topple Starbucks

AFP  |  New York 

Chinese chain Luckin, battling to dethrone in the Asian giant, has raised $561 million ahead of its Wall Street listing, an IPO consulting firm said Thursday.

The Chinese company, which will debut on the Nasdaq Friday, set its share price at $17, at the high end of the range it announced in May.

It sold 33 million American depository receipts (ADRs) after initially marketing 30 million, said Renaissance Capital, which specializes in initial public offerings. The listing values the firm at more than $3.9 billion, according to

ADRs allow foreign companies to list in without being subject to strict rules that apply to US-based companies.

plans to use the funds to expand its network and lure new customers.

Since it was founded in 2017, the chain has built 2,370 stores in as of March 31, focusing on offering customers quick grab-and-go service at its small stores or fast delivery to their homes and offices.

It uses a variety of coupons like free coffees and discounted cups to rope in customers and get them coming back to its stores.

The aggressive strategy mirrors tactics used by other Chinese startups that have dislodged Western brands from one of the world's top consumer markets.

The expansion and high marketing costs have seen its losses balloon in the 18 months it has been in business, racking up a loss of $241 million last year on $125 million in sales.

Luckin's caffeine-fuelled expansion has been funded by investors including Centurium Capital, a private equity fund founded by the former of Warburg Pincus, and

Its founder earlier founded publicly-traded CAR Inc, one of China's largest car rental companies.

plans to open 2,500 stores this year and unseat as China's largest chain.

is Starbucks' fastest-growing and second biggest market after the

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 17 2019. 12:01 IST