SHEIN to Secure New Funds, Valuation Drops Below $70B
Chinese online fashion group SHEIN is about to close a new fundraising round at a reduced valuation of between $65 billion and $70 billion, local media outlet 36Kr reported on February 22.
Investors include Sequoia Capital China, Tiger Fund, Mubadala, General Atlantic, Coatue, and DST. As much as $1 billion may be raised from Mubadala alone.
At the end of 2021, SHEIN raised about $1.5 billion. The valuation of the company at that time was initially $100 billion but was later adjusted to $65 billion. After the completion of its fundraising round this year, SHEIN’s valuation will be on par with that at the end of 2021.
A SHEIN spokesperson reacted that “this news are not true”, adding that “There is no IPO plan at present.”
Temu, a shopping app owned by Shanghai-based internet giant PDD Holdings, has emerged as a fierce competitor in the North American market. According to the latest data from Sensor Tower, as of the end of January this year, Temu has been downloaded nearly 20 million times worldwide. Over 10 million customers have made a purchase on the app, and over 90% of those are from North America.
While SHEIN has been profitable for four consecutive years, SHEIN has historically been tight-lipped about its financials, especially its profits. However, according to the Financial Times, SHEIN recently disclosed in an investor document that its 2022 revenue reached $22.7 billion and its profit was $700 million, which was lower than its 2021 profit of $1.1 billion. According to the investor materials, SHEIN’s 2025 targets include $58.5 billion in revenue, $7.5 billion in net profit, and $80.6 billion in gross merchandise volume.
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Many industry experts may regard these targets as overly ambitious. 36Kr cited an international e-commerce advisor, “A net profit of $7.5 billion means that SHEIN will have to achieve a 10-fold profit growth in the next three years. That would be quite a feat.”
SHEIN is now promoting its platform model, a comprehensive platform similar to Alibaba‘s Taobao, in Brazil, Mexico, the United States, and the Middle East. Just a few weeks ago, SHEIN announced the appointment of Marcelo Claure, former COO of SoftBank, to the position of chairman of SHEIN Latin America. His joining is considered a big move for SHEIN to focus on the Latin American market.