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Another week, another IPO in the US that has lathered money After the prestigious Uber listing, the ambitious Chinese start-up Luckin Coffee has raised up to $ 650.8 million on the Nasdaq after setting the price of his shares at $ 17.
Despite worries over his heavy losses and low potential for short-term profitability, Luckin seems to have been favorably received by investors. The company set the price of its shares at the top of its range of $ 15 to $ 17 and increased the offer to 33 million euros, three million more than expected. This gives Luckin a first net increase of $ 571.2 million, although this increase could reach $ 650.8 million if subscribers took the full additional allocation of 4.95 million proposed "greenshoe" shares.
The company will be listed on Friday under the symbol "LK".
Luckin asked to go public last month, just weeks after the close of a $ 150 million Series B + financing round led by New York-based private equity firm Blackrock, which holds interestingly a 6.58% stake in Starbucks. The transaction valued Luckin at $ 2.9 billion and took the company three years to $ 550 million raised so far by investors.
The company spent huge amounts of money trying to quickly create a competing brand of Starbucks and the presence that the American company had created over the past 20 years in China. Through aggressive promotions and coupons, the company recorded a loss of $ 475 million in 2018, its only full year of business so far, with a business turnover of $ 125 million. For the first quarter of 2019, the company recorded a loss of $ 85 million for a total business of $ 71 million.
We recently explored the activity, which you can read here with a subscription to our Extra Crunch service, but we have long covered the approach of the start-up "Money is not an object" for the construction of a digital rival for Starbucks in China.
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