Recently, SHEIN was revealed to have secretly submitted a statement for an IPO in the United States, with a valuation of up to $90 billion. Similar to previous rumors of response, SHEIN officials have "temporarily no response" or expressed "not very clear" to the public.
To reduce unnecessary interference in IPOs, secret trading is common in US stocks, which is also a silent measure taken by companies to protect themselves, "a head of an investment bank specializing in US stock IPOs told reporters.
This Chinese cross-border e-commerce unicorn, founded in Nanjing in 2008 and relocated to Guangzhou in 2015, has now moved its headquarters to Singapore. It has expanded from initially focusing on wedding dresses made in China to a full range of products, becoming a shining new star in the global e-commerce field.
Tortuous listing path: valuation has shrunk by nearly half
This is not the first time SHEIN has reported a listing.
SHEIN has been preparing for listing since 2020, but due to various factors, the listing plan was put on hold. In 2022, SHEIN restarted its IPO plan once again, but soon the IPO plan was suspended again.
Public information shows that in the past 10 years, SHEIN has completed a total of 9 rounds of financing, with numerous internationally renowned investment institutions participating.
Specifically, SHEIN's A-round financing took place in 2013, receiving $5 million from Chifu Asia's investment; In 2015, the B-round financing was completed, with Jinglin and IDG investing 300 million RMB and a valuation of 1.5 billion RMB; In 2018, completed the C-round financing and investment in Sequoia, with a valuation of 2.5 billion US dollars; In 2019, the D-round financing was completed, with investments in Sequoia, Tiger Global, and others exceeding $500 million, with a valuation exceeding $5 billion; In 2020, the E-round financing was completed with a valuation of over $15 billion.
It is worth noting that in April 2022, SHEIN completed a $1 billion financing involving Tiger Global, Sequoia China, Pan Atlantic Investment Group, Shunwei Capital, and others, with a valuation of up to $100 billion at the time.
But in stark contrast, in the latest round of financing in May 2023, SHEIN raised $2 billion, with a new valuation of $66 billion after the financing, which is "shrinking" compared to the previous round.
"With the uncertainty of the external economic outlook and the rise of interest rates, investors have become more cautious about the value of risky assets, and the market valuations of start-ups and large technology companies have declined." An investor close to SHEIN told the reporter, "In July, the valuation of TikTok's parent company ByteDance in the secondary market also fell below $300 billion, down at least 25% from the same period last year."
More insiders have stated that based on the recent changes in shares in the secondary market, the current market valuation of SHEIN is approximately $50 billion to $60 billion, lower than the $66 billion raised in May this year.
The valuation may shrink or be based on a decline in performance.
Previously, there were reports of investment bank roadshows showing that SHEIN's revenue in 2022 had reached $22.7 billion, with a net profit of $700 million, but a year-on-year decrease of 36%.
At present, there is once again news in the market that SHEIN is seeking an IPO at a valuation of $90 billion. It is reported that it has invited investors to participate in the roadshow and secretly completed the submission to the US Securities and Exchange Commission. Based on the acceleration of domestic e-commerce giants' overseas expansion, SHEIN may face pressure in terms of business operations. Raising funds through IPO to better cope with industry competition may also be an important reason for SHEIN's choice to go public.
Accelerating Internationalization: Identity Transformation and Acquisition Layout
In recent years, relying on the "small order quick return" model, SHEIN has taken a prominent position in the domestic cross-border e-commerce field.
Public information shows that currently, SHEIN has directly served consumers in over 150 countries and regions worldwide. According to the well-known market research firm Apptopia's ranking data, SHEIN won the global shopping application download championship in 2022.
According to SHEIN's previous goal, the revenue scale will double to reach 58.5 billion US dollars by 2025, surpassing retail giant H& The total of existing annual sales of M and ZARA; The GMV target is as high as $80.6 billion, an increase of 174% compared to 2022.
It is intriguing that with the development of the business, SHEIN's brand entity and corporate nature have also undergone multiple adjustments.
In October 2008, SHEIN was established in Nanjing, with the main body of the company being Nanjing Dianwei Information Technology Co., Ltd. and later changed to Guangzhou Xiyin International Import and Export Co., Ltd. In December 2019, it was changed to a controlling company, ZOETOP BUSINESS CO., LIMITED, established in Hong Kong, China in 2015. At the end of 2021, SHEIN underwent another equity structure change, with the controlling shareholder changing from Zhuo Tian Business Limited to a Singapore company (SHEIN APP operating entity). The type of enterprise has also changed from sole proprietorship by Taiwanese, Hong Kong, and Macau legal persons to sole proprietorship by foreign legal persons.
According to Tianyancha, the founder of SHEIN, Xu Yangtian, no longer serves as a legal person in any domestic enterprise. His direct or indirect role as a legal person and shareholding in all enterprises have been cancelled. Nanjing Lingtian Information Technology Co., Ltd., which had previously completed multiple rounds of financing, is also one of them.
At the same time as the equity changes, SHEIN has frequently launched attacks and continuously expanded its presence in the international market.
The company has successively acquired SPARC Group, the parent company of fast fashion women's clothing brand Forever 21, and acquired one-third of the equity of the group; Miss guided, a fast fashion brand under the British fashion retail group Star Lion Group, owns all intellectual property rights of the brand.
Compared to its high reputation overseas, SHEIN is extremely low-key in China and rarely receives media interviews.
The latest public disclosure was by Tang Wei, former Chairman and President of Bear Stearns International Holdings and now Executive Vice Chairman of SHEIN, in a letter to investors, stating that driven by the sales momentum in the US market, the company's sales growth accelerated in the first half of 2023 compared to the second half of 2022, and its profits reached a new high.
In the 2023 Global Unicorn List released by Hurun Baifu recently, SHEIN ranks fourth with a valuation of 450 billion yuan. Its founder, Xu Yangtian, also ranked as the richest person in Guangzhou in the "New Fortune 500" selection. If successfully listed, SHEIN is expected to become the Chinese concept stock with the highest valuation for IPOs in the United States since 2021.