But unlike Starbucks, Luckin is losing money. 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.
Most of Luckin's stores are small, have few seats and are used mainly as a place to pick up mobile orders. It also offers delivery in 30 minutes and promises a refund for delays or spilled drinks. Through its app, customers can watch their coffee being made after making an order.
Luckin raised $561 million in its initial public offering Friday by selling 33 million American depositary shares at $17 apiece. The ADS, which are trading on Nasdaq under the symbol "LK," closed at $20.38 after rising as high as $25.96 earlier in the day.