Luckin Coffee Leverages Pick-Up Store Format and Delivery Services, IPO Set to Fund Further Expansion
Luckin Coffee, China’s answer to Starbucks, raised some $571.2 million through an IPO of American Depository Receipts for 33 million of its shares on the Nasdaq, pricing its shares at the top end of the pre-listing debut range of $17. The amount raised could hit $650.8 million if the underwriters exercise their option to purchase additional shares.
- Luckin Coffee provides fast delivery services to attract customers looking for convenience.
- The company uses a pick-up store format (that also offers delivery) that typically has low rent and fit-out costs to allow the company to expand rapidly at lower cost.
- Luckin Coffee will use the funds raised through the IPO to open more stores and fund promotions for the coming three to five years.