General Atlantic and Mubadala-Backed Shein Files for IPO in U.S., Targets $90bn Valuation

Fashion company Shein has confidentially filed to go public in the United States, according to two sources familiar with the matter, in what is likely to be one of the most valuable China-founded companies to list in New York.

Goldman Sachs, JPMorgan Chase and Morgan Stanley have been hired as lead underwriters on the initial public offering (IPO), and Singapore-based Shein could launch its new share sale some time in 2024, the sources said.

Shein has not determined the size of the deal or the valuation at IPO, the sources said. Bloomberg reported earlier this month it targeted up to $90bn in the float.

Shein is backed by large investors including Abu Dhabi sovereign wealth fund Mubadala, venture capital group Sequoia China and private equity group General Atlantic.

Shein and the banks declined to comment.

The company founded in mainland China in 2012 was valued at more than $60bn in a May fundraising, down by a third from a funding round last year.

The most valuable China-founded enterprise to go public in the United States so far is ride-hailing giant Didi Global’s debut in 2021 at $68bn valuation.

The fast-fashion giant’s move to go public in the U.S. comes as the market for initial public offerings is struggling to rebound after a string of lacklustre stock market debuts.

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In recent months there were four major IPOs, and three of them disappointed investors.

Shares of German sandal-maker Birkenstock, grocery delivery app Instacart and chip designer Arm Holdings dropped below their IPO prices in the days that followed debuts, though Arm’s shares are now trading above that price.

“It doesn’t strike me as the most opportune time for Shein to come public, but if they need capital the markets are open … and investor sentiment has been more positive than it was a few weeks ago,” said Jason Benowitz, senior portfolio manager at CI Roosevelt.

“When investors can review the financials, I would expect to see pretty strong growth historically, the key question will be if they can kind of maintain the pace or to continue to gain market share going forward,” he said.

U.S. IPOs have raised about $23.64bn so far this year, compared with $21.3bn during the same period last year. In 2021, the comparable number was $300bn when the IPO market was close to its peak.

Source: Reuetrs

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