Exclusive: Luckin Coffee Denied Seeking Funds With A Valuation of USD 2 Billion
Luckin Coffee denied the Reuters news about its new funding round which was supposed to be with a valuation of USD 2 billion.
“HONG KONG (Reuters) - Luckin Coffee (瑞幸咖啡), an up-and-coming coffee chain with ambitions to challenge Starbucks in China, is targeting a valuation of USD 1.5 billion to 2 billion as it launches a new round of funding”, according to a Reuters news on Nov 6, 2018.
According to the Reuters, this information was something “people familiar with the matter told Reuters”, and Luckin Coffee plans to raise USD 100 million to USD 300 million in fresh equity.
However, on the same day, EqualOcean tried to confirm this information with Luckin Coffee, ZHAO Yanyan (赵艳艳), the PR Director of which, told EqualOcean that “This information is not accurate”, without any further details.
Such a denial was not entirely negative, which means that Luckin Coffee did have a plan to start its new round of financing, while the valuation might be incorrect, or more probably this new round of financing was not that smooth. In many cases, for the purpose of public relationship control, enterprises often officially deny information about financing, even if it proves that financing is a fact afterward.
As a startup founded in Oct 2017, Luckin Coffee indeed achieved an incredibly rapid growth, raised more than USD 200 million in only two rounds of funding.
Capitals love Luckin Coffee caus it seems to be the only one Starbucks’ challenger, originated in China. With its one-year growth, Luckin Coffee successfully opened over 1,400 cafes in 21 cities, which number was over 40% of Starbucks has in China, after entering the Chinese market for almost 20 years.
On the other hand, some industry insiders noticed that all the early-stage investors of Luckin Coffee are somehow familiar or related with UCAR (神州优车, NEEQ:838006). The founder of Luckin Coffee QIAN Zhiya (钱治亚) used to be the COO of UCAR and one of Angel Round investor LU Zhengyao (陆正耀) is Chairman and CEO of UCAR. How to convince more diverse investors to join in this challenging game, and get rid of the label of "UCAR-related company", perhaps would be the key factor affecting the next round of financing.
- Author: ZHANG Fan; ZHANG Junbao contributed to this article. Write to ZHANG Fan at ZhangFan@EqualOcean.com