Mubadala to invest $1 billion in Luckin Coffee with Centurium Capital

Abu Dhabi's sovereign wealth fund Mubadala Investment has reached a strategic minority investment deal worth approximately $1 billion with Luckin Coffee's controlling shareholder, Centurium Capital. This investment reflects the increasing interest in China's consumer sector, as Luckin ramps up its store network and aims to strengthen its presence in both domestic and international markets.

Mubadala sees significant potential in China's expanding freshly brewed coffee market, and the deal is being finalized alongside Centurium. According to an SEC filing, the combined investment will result in Mubadala and its related entities owning around 22.1% of Luckin on a converted basis. This ownership also grants Mubadala the right to nominate a director to Luckin's board once the company's shareholding reaches a minimum of 5%, subject to the terms of the investment agreement.

As of June 30, Luckin had established over 36,000 stores globally, with nearly 500 million transaction customers in total. The company's second-quarter earnings revealed a 29% year-over-year increase in revenue, reaching approximately 15.9 billion yuan, and a 22% rise in operating profit, amounting to 2.1 billion yuan. The Mubadala investment adds a major institutional partner to Centurium and extends its investment horizon in Luckin.

For Mubadala, the deal provides exposure to one of China's fastest-growing consumer brands and potentially a role in the company's long-term strategy. Luckin is currently traded over the counter in the U.S. under the ticker LKNCY, following its earlier delisting from Nasdaq. On September 8, the stock closed at $33.55, marking a 3.6% decrease that day.