Chinese online fashion retailer Shein is reportedly set to raise around $2 billion in a new funding round this month, UAE’s sovereign wealth fund Mubadala is a major investor in this round as are existing investors.
Shein has taken the fashion world by storm. It penetrated the global fashion market rapidly during the pandemic when all major brands were struggling. It is also and is aiming for a US listing in the second half of this year, information that is known to three people with knowledge of its plans according to Reuters. Shein said they do not currently have plans for an IPO and declined to comment further.
According to sources the company last month held initial talks with several investment banks to pick lead book-runners for the US IPO, said two of the sources with direct knowledge of the plans. The float, if successful, would be one of the biggest worldwide this year and a test of US investor appetite for Chinese companies amid volatile capital markets and geopolitical tensions.
Shein is in talks with investors for a funding round that would value it at $100 billion about the same as H&M and Inditex combined. Shein pumps out far more styles than its rivals, with thousands of new items added to its website every day. It rolled 431877 styles since its arrival, more than combined offerings by its closest rivals that include 4414 by H&M group, 6849 by Zara group, and 18343 by Boohoo.
Shein cut its valuation to $64 billion in this fundraising, down by a third from a funding round a year ago, according to six sources with knowledge of the matter. SHEIN, founded by Chinese entrepreneur Chris Xu, has grown into one of the world’s largest online fashion marketplaces since its 2008 launch in Nanjing. It produces clothing in China to sell online in the United States, Europe, and Asia, selling items such as $10 dresses and $5 tops.
In recent years, the company has made a Singapore firm it’s de facto holding company and Xu has also become a permanent resident of the city-state, Reuters reported last year. The moves were designed so that Shein could bypass seeking Chinese regulatory approval for the listing. Shein has started manufacturing in Turkey and will open a large facility in Poland as part of its European expansion plan.
