Shein backers look to sell shares at 30% discount, valuing it as low as US$45 billion amid dimming IPO prospects

Shein investors are trying to sell shares in private market deals that value the online fashion giant at as low as US$45 billion, reflecting dwindling appetite for a company struggling with intensifying competition and regulatory scrutiny ahead of a long-awaited US debut.

Shareholders offered stock at valuations ranging from US$45 billion to US$55 billion in late 2023, people familiar with the matter said. That’s down from the roughly US$66 billion Shein achieved during a May round of fundraising. But they struggled to find buyers even at those depressed levels, raising the prospect of a further loss of value, the people said, asking to remain anonymous discussing private transactions.

The latest offers, which haven’t previously been reported, show how the gap is widening between market appetite and Shein’s target of up to US$90 billion in an initial public offering. While private transactions aren’t often equivalent to levels a company can eventually garner on public markets, they’re a useful barometer of investor sentiment.

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Shein’s shares changed hands at around US$50 billion to US$60 billion in the second quarter of last year, when it aimed to fetch a valuation of US$80 billion to US$90 billion in a listing, Bloomberg News reported in November. But liquidity has dried up further since, the people said. In one unusual transaction in late 2023, Shein changed hands at about a US$30 billion valuation – though in that case, an indebted seller was forced to unload in a hurry, one of the people said.

The declining valuation casts a cloud over Shein’s blockbuster listing, which is now under review by China’s cyberspace administration. The internet overseer is looking into its data handling and sharing practices, a process that could take months. Meanwhile, lawmakers in the US have urged the Securities and Exchange Commission to halt the IPO until it verifies the company does not use forced labour in its supply chain.

Shein, founded in Nanjing and now headquartered in Singapore, was the world’s third most valuable start-up in 2022, when a funding round valued the company at US$100 billion.