Business

Luckin Coffee, the Starbucks of China, goes public in New York

Luckin Coffee, the Starbucks of China, goes public in New York

— 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.

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 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.

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.