Shein Stealthy Move: Fashion powerhouse Shein has made a confidential filing for an IPO in the United States, insiders reveal. If successful, this move is poised to make Shein one of the most valuable China-founded companies to grace the New York listing stage.
Lead underwriters for the IPO include financial heavyweights Goldman Sachs, JPMorgan Chase, and Morgan Stanley. While the IPO is anticipated for 2024, specifics like the size and valuation remain up in the air. Bloomberg previously hinted at a lofty $90 billion target for the IPO.
Founded in mainland China in 2012, Shein hit a valuation north of $60 billion in a May fundraising round, marking a dip of one-third from the previous year’s funding round. Worth noting is that Didi Global’s 2021 debut at a $68 billion valuation holds the title for the most valuable China-founded enterprise to go public in the U.S.
Despite the recent lackluster performances in the IPO market, with names like Birkenstock, Instacart, and Arm Holdings, Shein’s decision to hit the public stage reflects a strategic play to secure capital in what appears to be a market showing signs of positive sentiment.
Senior portfolio manager at CI Roosevelt, Jason Benowitz, weighs in: “When investors can review the financials, I would expect to see pretty strong growth historically… the key question will be if they can kind of maintain the pace or to continue to gain market share going forward.”
While U.S. IPOs have garnered about $23.64 billion this year, compared to $21.3 billion during the same period last year, it’s still a far cry from the peak of $300 billion in 2021.
Shein’s discreet roadshows in the U.S. suggest an ongoing effort to build anticipation for the IPO. It remains to be seen if the company has crossed all regulatory hurdles, including filing with the China Securities Regulatory Commission (CSRC), a prerequisite for Chinese companies eyeing offshore offerings.
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Despite potential roadblocks, such as the SEC’s August request for an audit of Shein’s supply chain over alleged forced labor, the company’s disruptive presence in the retail space is likely to garner substantial investor interest, as noted by Neil Saunders, managing director at GlobalData.
Renowned for its budget-friendly and on-trend offerings, Shein’s direct shipping strategy from China has strategically positioned it in the market. The August partnership with SPARC Group aimed to further extend its market reach.
In a landscape of peaking interest rates and potential regulatory shifts for small retailers, industry watchers, including Sumeet Singh of Aequitas Research, view Shein’s move to tap into capital markets as both strategic and timely. Overall, the confidential U.S. IPO filing underscores Shein’s confidence in the prevailing market conditions.
Our Reader’s Queries
Can you invest in Shein?
As of late 2023, Shein was still a privately held company and not yet on the stock market. However, the fast-fashion group had plans to complete an IPO in 2024.
Who are the shareholders of Shein?
Shein is under the ownership of Nanjing Lingtian Information Technology, its parent company. Despite being a private company, it has four major shareholders, namely JAFCO Asia, IDG Capital, Sequoia Capital China, and Tiger Global Management. Although the ownership of Shein is often shrouded in mystery, these entities have a significant stake in the company.
Is Shein listed?
On November 27, Shein, a Chinese internet retailer, filed for a US IPO in private. The company is anticipated to go public in 2024, and with a valuation of $66bn, it is set to become one of the biggest US listings in the last ten years.