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

FILE PHOTO: The logo is seen at a Luckin Coffee store in Beijing, China, February 28, 2019. REUTERS/Jason Lee/File Photo

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

Each ADS represents eight Class A shares, the company said bit.ly/2YbOaoZ.

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 loss making and has warned it may continue to incur losses in the foreseeable future.

Its recorded a net loss to shareholders of $475.4 million and total revenue of $125.27 million, according to the filing. For the first three months of 2019, it posted a net loss of $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 and is backed by Singapore’s sovereign wealth fund, GIC Pte Ltd.

Other investors in the company include U.S. money manager BlackRock Inc and Chinese investment firms Centurium Capital and Joy Capital.

The company intends to list on Nasdaq under the symbol “LK”.

Credit Suisse, Morgan Stanley, CICC and Haitong International are leading a six-member team of IPO underwriters.