Two months after confidentially filing to go public in the US, the Chinese fast fashion behemoth SHEIN has still made no further progress on its highly anticipated initial public offering. Investors are losing their appetite for the company, which was once valued at as high as 100 billion USD.
SHEIN reportedly raised 2 billion USD during its latest funding round in May 2023, taking the company to a valuation of 66 billion USD. This figure represented a downgrade of 30% from the previous valuation as SHEIN decided to take a more conservative approach after Big Tech shares took a hit in early 2023.
In the latest turn of events, SHEIN’s valuation has plummeted a further 30% to 45 billion USD, reflecting rapidly declining investor interest in the company. According to sources quoted by Bloomberg, investors are struggling to find buyers despite the relatively low valuation, raising the prospect of a further drop in valuation in the months ahead.
Investors’ weak appetite for the fast fashion juggernaut is unsurprising given that one of the last Chinese companies to seek an IPO overseas was the ride-hailing company Didi. The Beijing-headquartered company delisted from the New York Stock Exchange in May 2022 after Chinese regulators shut down the Didi app in 2021, citing national security concerns. Didi’s market capitalisation tumbled by 80% and the company only recently returned to profit in October 2023.
Following the case of Didi, all companies seeking an IPO overseas are subject to a security review by China’s internet regulator, the Cyberspace Administration. Regulators are concerned about the possibility of Chinese user data being stored in the US – a fear that should hopefully be alleviated by the fact that SHEIN does not sell products in China.