April 23, 2019, the US Securities and Exchange Commission (SEC) announced that Luckin Coffe officially filed for an initial public offering (IPO) by submitting the F-1 form (The F-1 form is the registration statement for non-US companies), meaning the less than two years China’s startup company, has finally stepped forward toward its IPO in the US stock market. According to this registration statement, Luckin Coffee seeks to list on the NASDAQ exchange in the United States under the code LK code. Credit Suisse and Morgan Stanley will be the underwriters. As EqualOcean being the first platform to unveil Luckin's IPO intention two months ago, we've been continuously given insights on this issue.
In the registration statement, Luckin Coffee reveals its financial data in 2018 and the first quarter of 2019. The net income in 2018 was CNY 840 million, with a net loss of CNY 1.62 billion. While the net income as of March 31, 2019 was CNY 480 million, with a net loss of CNY 550 million.
In the statement, it also announced the number of directly operated stores reached 2,370 by March 31, 2019. The filing detailed plans to open an additional 2,500 stores in the country by the end of 2019, surpassing Starbucks, which operates more than 3,700 stores.
“China's coffee market is highly under-penetrated. Inconsistent qualities, high prices and inconvenience have hampered the growth of the freshly brewed coffee market in China,” the company said in its filing. “We believe that our model has successfully driven the mass market coffee consumption in China by addressing these pain points. We aim to become the largest coffee network in China, in terms of number of stores, by the end of 2019.”
Only 4 days ago, Luckin Coffee completed series B+ fundraising with an extra amount of USD 150 million, valuation went up to USD 2.9 billion. The private equity fund under Black Rock invests USD 125 million in this round.
The relationship between BlackRock and Starbucks has made this B+ financing a bit of concern since BlackRock holds a total of 81.8 million shares of Starbucks through a number of sub-funds, which represents the second largest shareholder of Starbucks. The industry believes that investment is crucial for Luckin Coffee at this time, especially to keep the company in a fast growing speed. However it seems what’s more important for Luckin at this point is, with BlackRock's investment, it would be more convincing to for Luckin to obtain endorsements from mainstream US investors.