Shein’s shareholders are considering cashing out ahead of the company’s IPO while private bids are 30% lower than its US$100 billion valuation in April, Bloomberg reported.
Slow growth and scrutiny over the Chinese fashion giant’s business could hurt its valuation as well as the timeline of its IPO. Those factors have also encouraged investors to sell at least part of their stakes privately amid the recent market turmoil in tech companies.
Shein told existing investors during a fundraising round earlier this year that it plans to have an IPO in the US as soon as 2024.
Shein’s sales growth has slowed to nearly 60%, going from US$10 billion in 2020 to US$16 billion in 2021. Moreover, its fast-fashion business has also been under the spotlight for allegations of environmental damage, worker exploitation, and copyright theft.
The valuation drop may follow a trend of worsening global investor sentiment in the tech industry as well as a crackdown by the Chinese government on homegrown firms.
See also: To Shein or not to Shein: the billion-dollar question facing every ecommerce player
Editing by Samreen Ahmad and Arpit Nayak
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