Morning Report: The biggest round out today is $200 million for China’s Luckin Coffee. What is it?
The funding round values Luckin at $1 billion, so say hello to the world’s newest unicorn.
The scale of capital and the fact that the round is labeled a Series A is confusing. To fill you in this morning, here are a few notes from what we’ve picked up about the company.
First, Luckin Coffee has rapidly grown. Per our own Celia Wan, the company “expanded [seemingly] overnight” and is now “everywhere in China.” In her experience, the company is working to provide an upscale experience at a reasonable price point. It’s using a mass-store model to compete with Starbucks in China.
(On the mass expansion point, this article noted that when the author first installed the Luckin app, “[i]t showed that there were no stores in Shenzhen yet, but dozens were under construction.” The next week the same author noted some of the stores were already delivering coffee.)
The Starbucks point is critical. Quartz reported this morning that “Starbucks’ second-largest market after the US is China, where it has over 3,300 stores.” Luckin wants to challenge the foreign giant domestically.
Critically, however, Luckin also powers delivered coffee to offices and other locales. As with much in China, the company’s app is critical to interacting with its hybrid physical and digital experience.
But while Luckin is rapidly building out its footprint, there is more competition on the horizon. Tim Horton’s, Canada’s pride, is also making the jump to China. With 1,500 stores planned, it’s going to be a three-way race.
From The Crunchbase Daily:
Global venture capital activity has once again set post-Dot Com records. Deal and dollar volume in the second quarter blew past last quarters’ highs, propelled by an upswing in late-stage dealmaking and a surge in funding for Chinese startups. For the first half of 2018, the amount of money invested — $175 billion by Crunchbase projections—already exceeds annual totals from the years 2002 through 2016.
Another day, another collossal scooter funding round. This time, Uber is jumping in with Google’s GV in a $335 million investment into scooter heavyweight Lime. The round will bring 18-month-old Lime’s aggregate funding to $467 million.
In a move to beef up its enterprise security management offerings, AT&T announced plans to acquire venture-backed cybersecurity provider AlienVault for an undisclosed sum. Founded in 2007, Silicon Valley-based AlienVault previously raised nearly $120 million in venture funding.
Silicon Valley VC Scale Venture Partners has raised $400 million for its sixth fund, which will invest in U.S. software startups, with a particular focus on artificial intelligence.