158 coffee shops supported an IPO last night.

In 2025, the global coffee market is experiencing an unprecedented upheaval.

On one hand, industry giants are divesting their assets, indicating a "downward trend." For example, the equity of Starbucks' China business has attracted more than 20 institutions to bid. The latest news is that institutions such as Boyu Capital, Carlyle Group, EQT, Sequoia Capital China, and Primavera Capital have entered the final round.

In addition, Coca - Cola has publicly put its largest coffee chain in the UK, Costa, up for sale. JDE Peet's, the parent company of the premium coffee brand Peet's Coffee, was acquired by Keurig Dr Pepper for 15.7 billion euros.

On the other hand, last night, a regional chain brand called Black Rock Coffee (commonly translated as "Black Stone Coffee" or "Black Rock Coffee" in China. To avoid confusion with the coffee brand "Black Stone Coffee" in Guiyang, China, it is translated as "Black Rock" in this article) went public on the US stock market against the trend. It raised funds at an issue price of $20 per share, and the closing price was $27.53, a 38% increase from the issue price. Its total market value is approximately $1.31 billion (9.3 billion yuan). This is a rare "upward trend" in the coffee industry this year.

It is reported that the IPO demand for Black Rock Coffee Bar was extremely strong, with the market demand reaching 20 times the issuance scale. This IPO is also the first in the US food service industry since the listing of the restaurant chain Cava in 2023. The market sees it as a touchstone to test investors' interest in the consumer sector.

When global giants are struggling with cost pressures and market saturation, why can Black Rock Coffee buck the trend?

After reviewing the materials, I believe the answer may lie in two key words: the "drive - thru" model and digitalization. The drive - thru model carves out a unique niche in the market among the giants, and digitalization brings efficiency. Together, they form its path to break through.

The funds raised from this successful listing will help Black Rock Coffee Bar further expand its store network and compete with large chain brands such as Starbucks and Dutch Bros.

158 Coffee Stores with the "Drive - Thru" Model

When looking at the development of the coffee industry, we often use Starbucks as a reference. Starbucks is the largest coffee chain globally, positioning itself in the premium coffee segment at around 30 yuan per cup. It has taken a standardized and efficient expansion path based on the "third - place" concept. Many subsequent coffee and tea shops have either emulated Starbucks or taken the path of offering more affordable alternatives or targeting lower - tier markets.

Black Rock Coffee has taken a different route since its establishment. Different from Starbucks' "third - place" concept, it mainly adopts the "drive - thru" and quick - pick - up models, reducing the service time per cup to less than 30 seconds. This efficient approach meets the fast - paced needs of consumers in North American suburbs, a scenario not commonly seen in China. This also reflects the regional characteristics and limitations of the Black Rock Coffee model.

In terms of form, about three - quarters of its stores have indoor spaces to meet the short - stay needs of some customers. However, the overall positioning is aimed at commuting and community scenarios, emphasizing high - frequency access and a balance between efficiency and customer reach.

In terms of its origin, Starbucks evolved from the "premium" coffee segment, while Black Rock Coffee takes a "non - premium" and more affordable route. Its founder did not start in the coffee business but from a simple drive - thru store in Portland, Oregon.

In 2008, the founder Jeff Hermandez's family worked more than 70 hours a week, a "sweat - equity" startup approach, which led to an extreme pursuit of efficiency.

In 2016, Jeff's friend Bobby Kaufmann moved his family 1,500 miles to Arizona to expand the market. During the three - year preparation period, Kaufmann had to work remotely for his original technology company to make a living while also participating in physical labor such as pipeline digging and counter installation for the new store. His wife even had to drive a snack cart on the golf course to supplement the family income. This kind of execution ability has become the core spirit that differentiates Black Rock Coffee from its peers. Eventually, he successfully replicated the operating experience from the Pacific Northwest to the new market.

During its brand development, Black Rock Coffee has undergone two key transformations: When the first store in Arizona opened in 2016, it ensured the consistency of service standards by dispatching experienced employees from the Oregon headquarters, successfully replicating the operating experience from the Pacific Northwest to the new market.

Against the backdrop of the industry price war, Black Rock Coffee's relatively affordable pricing strategy avoids the low - price competition like Luckin Coffee and offers better value for money than Starbucks. This pricing strategy has enabled it to maintain growth during the period of consumer downgrading. As of June 30, 2025, this coffee chain has a total of 158 stores in seven US states, which is not a large number.

Recover Investment and Make Profits in 18 Months per Store

Black Rock Coffee is a dark horse in the coffee industry. Its financial highlights include a replicable high - return store - opening model and steadily growing revenue.

In 2024, the company's total revenue reached $160.9 million, a year - on - year increase of 20.8%. In the first half of 2025, the revenue was $95.214 million, a year - on - year increase of 24.2%.

The company is currently in a loss - making stage, but the loss has narrowed to $1.945 million, better than the $2.235 million loss in the same period of 2024. Its profitability indicators are also continuously improving: the operating profit margin was 3.7% in 2024 and has increased to 5.8% in the first half of 2025, and the adjusted EBITDA margin reached 14.8%.

More importantly, in terms of quality indicators, the same - store sales growth rate in the first half of 2025 was 10.1%, and the store - level profit margin increased to 29.0%. This model is also known in the industry as "high turnover + low cost."

The economic benefits of each Black Rock Coffee store are quite considerable.

A new store can reach a "healthy level" in about 18 months after opening: the average annual unit volume (AUV) of a single store is about $1.1 million, the store - level profit margin is maintained at around 22%, and the capital investment for a new store is about $600,000. This means that investors can recover their investment in about a year and a half and achieve a cash return rate of about 40%.

In terms of product structure, although coffee remains the core, the energy drink Fuel series is becoming the second growth curve: its sales share increased from about 22% in 2024 to about 24% in the first half of 2025.

The optimization of the financial structure is inseparable from strategic adjustments. The company's CEO emphasized in the prospectus: "The marginal cost for each additional dollar of revenue continues to decline, thanks to the application of digital tools."

Data shows that in the second quarter of 2025, mobile orders accounted for 15% of the store's revenue. Digitalization not only reduces labor costs but also optimizes the product structure through consumer data analysis. As of June 2025, the brand's membership system has accumulated more than 1.8 million users, and membership orders account for as high as 64%, forming a stable consumer stickiness.

Compared with the dilemma of Starbucks China, where the average customer spend decreased by 4% due to price cuts during the same period, Black Rock Coffee's combined strategy of increasing repeat purchases through the membership system and increasing the average customer spend with energy drinks demonstrates stronger anti - cyclical ability.

However, rapid expansion has also left the company short of cash. As of June 30, 2025, Black Rock Coffee held $18.46 million in cash and cash equivalents. The funds raised from this IPO are not simply for accelerating the opening of new stores. Instead, the company will first repay a revolving loan of about $113 million, pay the issuance fees, and supplement the working capital for daily operations.

The "Third Way"

During the once - in - a - century reshuffle of the global coffee market, Black Rock Coffee's IPO journey is of symbolic significance. It proves that there is a "third way" between Starbucks' global expansion model and Luckin's low - price offensive. Through precise scenario positioning, an efficient operating system, and a sound capital strategy, a regional brand can break through in a market surrounded by giants. This is also an interesting aspect of the coffee and tea industry.

Currently, the capital market is most concerned about whether Black Rock Coffee can replicate the growth curve of Dutch Bros, the leading company in the industry.

Dutch Bros was founded in 1992 by brothers Dane Boersma and Travis Boersma in Grants Pass, Oregon. Initially, it was just a coffee cart equipped with a double - headed espresso machine. It started regional expansion in 2000. In 2021, it expanded its business to 18 states across the United States. As of the second quarter of 2025, the total number of stores reached 1,043, including 725 company - owned stores and 318 franchised stores. Most of the stores adopt the Drive - Thru model, where customers can complete the entire process of ordering, paying, and picking up their food without getting out of the car.

Against the backdrop of the slowdown in US consumer growth and the continuation of a high - interest - rate environment, its store expansion speed and profit quality have both improved simultaneously. Dutch Bros went public in 2021, and its stock price has more than doubled since then. This also sets a relatively optimistic foundation for the stock price performance of Black Rock Coffee.

In the future, if it remains regional, how Black Rock Coffee can break through the ceiling is a problem. Currently, can this "third way" be applied in China? Although there are few similar drive - thru restaurant scenarios in China, it is indeed an idea.

Before the IPO, Jeff Hermandez, the founder of Black Rock Coffee, held 36.6% of the voting rights, the Viking Cake BR fund held 36.3%, and The Cynosure fund and Daniel Brand held 12.6% and 10.5% respectively.

This article is from the WeChat official account "East 40th Street Capital", author: Riemann, published by 36Kr with permission.