BEIJING, January 29 (TMTPost)-- Investors of Shein were said to be offer big discounts for share sales recently even though the China-based online fast fashion giant delivered robust growth in the past year.
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Shein backers offered stock at valuation ranging from $45 billion to US$55 billion to sell shares in private market in late 2023, Bloomberg cited people familiar with the matter. The valuation range which suggested a discount up to 30% since Shein achieved the valuation of around US$66 billion in a round of fundraising in last May. But the investors had difficulties in finding buyers even at such depressed levels, increasing probability of a further loss of value, the people said.
The discounts and investors’ struggling to find buyers raised concerns on Shein’s looming U.S. listing. The company was reportedly to have confidentially filed for initial public offering (IPO) in late November 2023 and could go public as early as 2024. Earlier this month, one of Shein’s partners revealed Shein generated “a lot more than” US$30 billion in a year,rasing speculation over Shein’s accounts as the company seems right on the track to IPO. Jamie Salter,the CEO of partner company Authentic Brand Group didn’t give a exact number though offered a glimpse into annual revenue, calling Shein “the fastest growing fashion retailer in the world, if not the biggest fashion retailer in the world.”
Founded in 2012, Shein has expanded its presence to over 150 countries and replaced ZARA and H&M in the U.S. market as the benchmark of the new-generation fast-fashion brands, with products sourced entirely from the Chinese supply chain.Shein was reported to consider IPO recent years, even its valuation dropped sharply from its peak , a warning signal reflecting its explosive growth was fading and was overtaken by Temu, an overseas platform launched by Chinese e-commerce giant PDD Holdings Inc. in last September.
A funding round of $1 billion in April 2022 brought Shein’s valuation to a peak of $100 billion. The fast fashion retailer accordingly entered into the top three most valuable private companies in the world, behind another TikTok parent ByteDance and the aerospace unicorn SpaceX, according to CB Insights, a global startup database and business analytics platform. The valuation also suggests Shein would be a fast fashion Titanic that overtakes the combination of two European rivals—H&M Hennes & Mauritz AB and Zara’s owner Inditex SA.
However, valuation of Shein and other startups kept dropping since then as wary toward risk assets increased amid uncertain economic outlook and higher interest rates. Shein was in talks with potential investors to raise up to $3 billion and the new fundraising would value the unicorn at $64 billion, shrinking more than a third from its valuation peak in April 2022, the Financial Times reported in January 2023. Reuters later learned Shein was valued at $60 billion after it raised around $2 billion in a new founding round in March.
Bloomberg reported in November 2023 that Shein is targeting to be valued up to $90 billion through its IPO in U.S., and hasn’t made final decision about the deal including its valuation and timing yet as it is still under consideration. $90 billion is much higher than the current valuation that the market priced in. In the secondary market, stakes that have recently changed hands valued Shein at about $50 billion to $60 billion, Bloomberg’s sources said.
