BEIJING, November 10 (TMTPost)— China-based online fast fashion star Shein is seeking an initial public offering (IPO) to  substantially upscale its valuation.

Credit：Visual China

Shein is targeting to be valued up to $90 billion through its IPO in U.S., and hasn’t made final decision about the deal including its valuation and timing yet as it is still under consideration, Bloomberg cited people familiar with the matter.

Founded in 2012, Shein has expanded its presence to over 150 countries and replaced ZARA and H&M in the U.S. market as the benchmark of the new-generation fast-fashion brands, with products sourced entirely from the Chinese supply chain. $90 billion is much higher than the current valuation that the market priced in. In the secondary market, stakes that have recently changed hands valued Shein at about $50 billion to $60 billion, the people said.  

A funding round of $1 billion in April 2022 brought Shein’s valuation to a peak of $100 billion. The fast fashion retailer accordingly entered into the top three most valuable private companies in the world, behind another TikTok parent ByteDance and the aerospace unicorn SpaceX, according to CB Insights, a global startup database and business analytics platform. The valuation also suggests Shein would be a fast fashion Titanic that overtakes the combination of two European rivals—H&M Hennes & Mauritz AB and Zara’s owner Inditex SA.

However, valuation of Shein and other startups kept dropping since then as wary toward risk assets increased amid uncertain economic outlook and higher interest rates. Shein was in talks with potential investors to raise up to $3 billion and the new fundraising would value the unicorn at $64 billion, shrinking more than a third from its valuation peak in April 2022, the Financial Times reported in January. Reuters later learned Shein was valued at $60 billion after it raised around $2 billion in a new founding round in March.

Shein was reported to consider IPO recent years, even its valuation dropped sharply from its peak , a warning signal reflecting its explosive growth was fading and was overtaken by Temu, an overseas platform launched by Chinese e-commerce giant PDD Holdings Inc. in last September.

Reuters report in late June that Shein has confidentially submitted its IPO registration with the U.S. Securities and Exchange Commission (SEC), choosing a popular way for private companies with less than $1 billion in revenue to pursue an IPO, and the deal could take place by the end of this year. Shein later denied the report. Its spokesperson called it “rumor”, without elaborating. Reuters reported in July that Shein is working with at least three investment banks including Goldman Sachs, Morgan Stanley, JPMorgan Chase and has been discussing with the New York Stock Exchange and Nasdaq about its possible IPO.

Spending on Temu for the first time outweighed Shein in the U.S. market in May, and the former was 20% higher than the latter that month, according to Bloomberg Second Measure, which analyzes billions of credit and debit card transactions. The data provider also estimated that Temu has consolidated its lead every month since May, and its sales in September have grown into more than twice as much as Shein in the United States.