Shein looks to raise funds that would reduce valuation by almost £30bn
Fast-fashion giant Shein is in talks to fundraise £2.4 billion ($3 billion), resulting in a valuation reduction from £81 billion ($100 billion) to £52 billion ($64 billion).
By opting to raise funds, the Chinese fast-fashion business' valuation will drop down by more than a third from its peak. This follows a downturn in profits that has led investors to re-evaluate tech start-up valuations.
The e-commerce platform, which was founded in 2008 by Chinese former marketing professional Chris Xu, is seeking to close fundraising from existing investors including Abu Dhabi sovereign wealth fund Mubadala, venture capital group Sequoia China, and private equity group General Atlantic.
The business was valued at just above £81 billion ($100 billion) during Shein’s last fundraising round in April 2022, making it the world’s third most-valuable private company at the time, behind TikTok parent ByteDance and Elon Musk’s SpaceX. Only two years prior, the company was valued at £12 billion ($15 billion).
According to The Financial Times, all investors that participated in the April fundraising would reprice their investment at the new valuation. Previous investors would therefore gain greater equity in the company.
It made £24.3 billion ($30 billion) in revenue last year, including £4.9 billion ($6 billion) in cash. The Financial Times' source said: “As a private company, Shein does not comment on market speculation.”.
Despite the current lack of funding, Shein expects to launch an IPO this year in the US - its largest market.