Luckin Coffee aims to raise up to $510m in an initial public offering as the Chinese start-up seeks to take on Starbucks in its home market.

The company said on Monday it plans to sell 30m American Depositary Shares, or ADS, at between $15 and $17 each. Each ADS represents eight ordinary shares.

Alongside the IPO, Luckin is offering 25m ordinary shares to Louis Dreyfus based on an assumed initial public offering price of $16 per ADS, the midpoint of price range.

The fresh cash comes as the company pushes to overtake Starbucks by number of outlets in China. Luckin said last year it plans to open 200 to 300 outlets a month, putting it on track to overtake Starbucks, which has more than 3,300 locations in China, by the end of this year.

In April, Luckin raised $150m from investors, including US asset manager BlackRock, in a funding round that valued the company at $2.9bn.

Since inception in June 2017, the company has expanded from one store in Beijing to 2,370 stores in 28 cities in China as of end-March, with more than 16.8m transacting customers and a customer repurchase rate in 2018 of more than 54 per cent.

Last year, Luckin had net revenue of Rmb840.7m ($125.3m) compared with Rmb250,000 in 2017 with a net loss widening to Rmb1.6bn last year from Rmb56.4m. For the first three months of 2019, net revenue was Rmb478.5m, up from about Rmb13m a year ago, with a net loss of Rmb551.8, up from Rmb132.2m.

Credit Suisse, Morgan Stanley, CICC and Haitong International are lead underwriters on the deal.

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