China’s Luckin Coffee confirms US$200 million raised in latest funding round as it aims for even faster delivery time

Less than 20 minutes – or 18.2 minutes to be precise – is how long Luckin Coffee says an average consumer in major Chinese cities has to wait after placing an order through their phone.

Still, the delivery time is not fast enough, at least for Jenny Qian Zhiya, chief executive of the cafe start-up, who is counting on a growing taste for coffee among the mostly tea-drinkers in the world’s most populous nation.

Having announced a US$200 million funding round this week, the cafe chain operator – which claims a unicorn-status valuation of US$1 billion – is building up its war chest to take on the country’s leading player Starbucks.

Luckin’s investors include Singapore’s sovereign fund GIC, Centurium Capital, a private equity fund founded by the former China head of Warburg Pincus, Legend Capital and Joy Capital.

“Although the delivery time is already within half an hour, we will cut it even shorter,” Qian said on Thursday. “The best experience should be that the coffee is still icy in summer when it reaches customers, while still hot enough to warm hands in winter.”

On the way to achieving that goal, the Xiamen-based start-up has already spent 1 billion yuan (US$150 million) in the six months since its soft launch, Qian said. About 600 physical stores have mushroomed in 13 Chinese cities since the start of the year, and five million cups were sold in the first four months.