Chinese startup Luckin Coffee's valuation doubles to $2.2 billion

FILE PHOTO: A deliveryman leaves a Luckin Coffee store with a takeout box for online sales in Beijing, China July 17, 2018. REUTERS/Jason Lee

BEIJING/SHANGHAI (Reuters) - Luckin Coffee, an up-and-coming coffee chain with ambitions to challenge Starbucks Corp in China, said on Wednesday it has raised $200 million in its latest funding round, increasing the company’s valuation to $2.2 billion.

The fundraising was led by investors including Singapore sovereign wealth fund GIC [GIC.UL] and China International Capital Corp Ltd, Luckin said in a statement.

Reuters had reported in November that the coffee chain was targeting a valuation of $1.5 billion to $2 billion in a new round of funding and was in early-stage talks with investment banks about an overseas initial public offering.

The firm’s supercharged growth plan has been built on cheap delivery, online ordering and big discounts, making it a thorn in the side of larger U.S. chain Starbucks.

In July, Luckin raised $200 million from investors including GIC, bringing its valuation to $1 billion. That made it one of the fastest firms in China to reach unicorn status.

Luckin said in its press release that by the end of November it had over 1,700 stores in 21 major cities around China. The firm, which only officially started operations in January, has been opening stores at breakneck speed.

Reporting by Adam Jourdan in Shanghai and Beijing Monitoring Desk; Editing by Muralikumar Anantharaman and Himani Sarkar