LUCKIN Coffee Inc., the Chinese challenger to Starbucks Corp., is looking to raise up to US$586.5 million, its filing with the U.S. Securities and Exchange Commission on Monday showed.

The company said it expects to offer 34.5 million American depository shares (ADS) priced between US$15 and US$17 per ADS in an initial public offering (IPO), giving it a valuation of between US$3.48 billion and US$3.95 billion.

Luckin Coffee, which has been expanding at breakneck speed, currently operates 2,370 stores in 28 Chinese cities and plans to open 2,500 more this year as it tries to displace Starbucks as China’s largest coffee chain.

The brand is banking on an increase in coffee consumption in China which has almost doubled to 8.7 billion cups last year from 4.4 billion in 2013 and is expected to further rise to 15.5 billion cups by 2023, according to a report cited by Luckin in its prospectus.

Luckin has also expanded outside coffee, allowing customers to buy food and other beverages such as grapefruit cheese jasmine tea and Sichuan cold noodles with pulled chicken via its app.

However, the company, founded in June 2017, is still lossmaking and has warned it may continue to incur losses in the foreseeable future. It recorded a net loss to shareholders of US$475.4 million and total revenue of US$125.27 million last year, according to the filing. For the first three months of 2019, it posted a net loss of US$85.3 million.

The coffee chain was founded by chief executive Qian Zhiya, the former chief operating officer of car rental firm Car Inc., and two other senior executives.(SD-Agencies)