Chinese fast-fashion giant Shein set to raise $2.7b, eyes US IPO later this year: Sources

HONG KONG — Chinese online fashion retailer Shein is set to raise around US$2 billion (S$2.7 billion) in a new funding round this month and is aiming for a US listing in the second half of this year, three people with knowledge of its plans told Reuters.

The 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, said two of the people and a separate person with knowledge of the matter.

Tiger Global Management became a new investor, said the first two people.

Shein cut its valuation to US$64 billion in this fund raising, 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 pick lead book runners for the US initial public offering (IPO), said two of the sources with direct knowledge of the plans.

The flotation, 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.

All sources declined to be identified as the information was confidential.

Shein said it does not currently have plans for an IPO and declined to comment further. GA, Mubadala and Sequoia China declined to comment. Tiger did not respond to a Reuters request for comment.

Investors who participated in Shein's 2022 fund raising will adjust the value of the stakes they bought earlier to reflect the company's current valuation, two of the sources said.

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 US, Europe and Asia, selling items such as US$10 dresses and US$5 tops.

It had attempted to list in the US in 2020, but shelved the plan partly due to unpredictable markets amid rising US-China tensions, sources previously said.

At the time, the company hired Bank of America, Goldman Sachs and JPMorgan to work on the IPO, but has decided to reselect its advisers, said three of the sources.

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