Luckin Coffee, the Starbucks of China, goes public in New York
Chinese coffee chain opened 2 years ago and will soon have more locations than Starbucks does
Luckin Coffee, a fast-growing rival to Starbucks in China, jolted higher in its U.S. stock market debut Friday.
The Chinese company, which opened its first store in Beijing less than two years ago, has 2,370 locations and plans to surpass the 3,700 stores Starbucks has in China by the end of the year.
Unlike Starbucks, Luckin is losing money.
Most of its stores are small, have few seats and are used mainly as a place to pick up mobile orders.
Through its app, customers can watch their coffee being made after making an order. It also offers delivery in 30 minutes or less, and says it gives customers refunds for any delays or spilled drinks.
Luckin raised $561 million in its initial public offering Friday by selling 33 million American depositary shares (ADS) at $17 apiece. That values the company at around $4 billion US.
The ADS, which is trading on the Nasdaq under the symbol "LK," shot up 44 per cent to $24.50 Friday. An ADS is a U.S. dollar-denominated equity share of a foreign-based company that can be bought or traded on a U.S. stock exchange.
Luckin has never been profitable. It brought in $125 million in revenue last year, but spent much more than that on coffee beans, store rent and other costs. Last year, it lost $475 million.
With files from CBC News