Luckin Coffee, flush with investor cash, weighs entry into Middle East markets — SkimNews
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- Luckin Coffee is evaluating entry into Persian Gulf markets after securing a $1 billion joint investment from Abu Dhabi's Mubadala sovereign wealth fund and controlling shareholder Centurium Capital in early September
- Luckin Chairman David Li, who also serves as CEO of Centurium, confirmed the Gulf talks to CNBC, while CEO Jinyi Guo cited "stable, high-frequency coffee demand" and a growing preference for low-sugar, health-oriented drinks as the regional appeal
- Mubadala, which manages $385 billion in assets and has invested more than $20 billion in China including into Shein and Dalian Wanda's shopping malls, became a direct Luckin investor without disclosing its stake size
- Luckin previously planned Middle East and India expansion in 2019 but scrapped those efforts following a 2020 accounting scandal that found executives had fabricated hundreds of millions in sales, leading to a US bankruptcy filing and Nasdaq delisting
- Centurium Capital engineered Luckin's turnaround to surpass Starbucks as China's biggest coffee chain by sales and separately acquired premium coffee brand Blue Bottle Coffee from Nestlé for reportedly less than $400 million in April
- Luckin's overseas footprint remains modest — 23 stores in New York, 150 in Malaysia, and 100 in Singapore — compared with more than 36,000 stores in mainland China and Hong Kong; the chain opened 2,714 net new stores in Q2 as revenue grew 28.5% to 15.9 billion yuan ($2.34 billion)
- Luckin trades over-the-counter at a roughly $9.6 billion valuation, less than the $13 billion-plus Starbucks fetched for its China business in last November's Boyu Capital deal, and is "actively pushing" for a US mainboard relisting pending Chinese regulatory approval with no clear timeline
Why it matters: The Gulf push marks Luckin's first major overseas ambition since the 2020 accounting fraud forced its US delisting, and gives Mubadala — which has deployed $20 billion-plus across China — a coffee-chain foothold alongside the country's largest coffee operator by sales, now valued at roughly $9.6 billion over-the-counter while still awaiting Chinese sign-off on a US relisting.
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