(Yicai Global) Dec. 12 -- Luckin Coffee, a Chinese coffee chain unicorn set up late last year, has doubled in value over the past five months to USD2.2 billion after closing its latest fundraising round.
Led by Joy Capital, Dazheng Capital, Singaporean sovereign wealth fund GIC and China International Capital, Luckin Coffee's B-series funding round raised USD200 million, the Beijing-based company said in a statement today. The startup was worth USD1 billion after a July round.
The latest funds will also go to product development, tech innovation and business development, the statement said. Liu Erhai, founder and managing partner of Joy Capital, will join the firm's board, it added.
The market disruptor is going after dominant rival Starbuck, which entered China in 1999 and has more than 3,600 stores. Formed in November 2017, Luckin Coffee had opened more than 1,700 outlets in over 20 cities in China by the end of last month, with 300 in Beijing and nearly 250 in Shanghai.
Founder Qian Zhiya is a former chief operating officer of Ucar, an online car-hailing service provider. As he also did at that firm, Qian has spent aggressively to seize market share. Luckin Coffee said it planned to invest CNY1 billion (USD145.1 million) in brand promotion and marketing in the early stage. Apart from its rivalry with Starbucks, the brand has distinguished itself through a delivery service, social marketing, aggressive discounting and huge advertising.
But the firm cannot hope to continue spending heavily. It has raised the minimum order for free deliveries to CNY55 (USD7.98) from CNY35 in Beijing and Shanghai. Customers in Chengdu, Guangzhou, Shenzhen and other cities still enjoy that perk on orders worth less than USD5.10. It will continue to offer appropriate discounts based on business conditions, the firm added.