Customers hold shopping bags outside the Shein Tokyo showroom in Tokyo on November 13, 2022. Reuters reports that the fast fashion retailer is aiming for a US IPO in the second half of 2023.
Noriko Hayashi | Bloomberg | Getty Images
Chinese fashion retailer Shein will raise about $2 billion in a new round of funding this month and is aiming for a U.S. listing in the second half of this year, three people with knowledge of its plans told Reuters.
United Arab Emirates sovereign wealth fund Mubadala is a major investor in this round, as are existing investors private equity firm General Atlantic (GA) and venture capital group Sequoia Capital China, two of the people and a separate person with knowledge of the matter said.
Tiger Global Management became a new investor, the first two people said.
Shein lowered his 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.
The company last month held initial talks with several investment banks to select lead bookrunners for the U.S. IPO, two of the sources with direct knowledge of the plans said.
If successful, the IPO would be one of the biggest in the world this year and a test of US investors’ appetite for Chinese companies amid volatile capital markets and geopolitical tensions.
All sources declined to be identified because the information was confidential.
Shein said it currently has no plans for an IPO and declined to comment further. GA, Mubadala, Tiger and Sequoia China declined to comment.
Investors who participated in Shein’s 2022 fundraiser will adjust the value of the stakes they bought earlier to reflect the company’s current valuation, two of the sources said.
Founded by Chinese entrepreneur Chris Xu, Shein has grown into one of the world’s largest online fashion marketplaces since launching in 2008 in Nanjing. It produces clothes in China to sell online in the US, Europe and Asia, selling items such as $10 dresses and $5 tops.
It had tried to list in the U.S. in 2020, but shelved the plan in part because of unpredictable markets amid rising U.S.-China tensions, sources have previously said.
At the time, the company had hired Bank of America, Goldman Sachs and JPMorgan to work on the IPO but has decided to re-select its advisers, three of the sources said.
A Chinese company?
Shein’s IPO plans will be closely watched after China last month introduced new rules outlining how companies can list overseas. Those rules followed a regulatory crackdown that has slowed U.S. IPOs by Chinese companies to a trickle.
Chinese companies raised only about $230 million in U.S. listings last year, a massive drop from $12.9 billion in 2021, according to Refinitiv data.
It was not immediately clear whether Shein plans to officially seek Chinese regulatory approval for its IPO.
In recent years, the company has made a Singapore company its de facto holding company and Xu has also become a permanent resident of the city-state, Reuters reported last year. The moves were designed to allow Shein to avoid seeking Chinese regulatory approval for the listing, sources have previously said.
Shein is expanding in Europe as it builds out its team in Ireland, said one of the sources and two separate people with knowledge of its business plans.
It has started manufacturing in Turkey and will open a large facility in Poland as part of its European expansion plan, they added.