Shein marketing campaign
Source: Shein Facebook

E-Commerce Giant Shein Isn’t Likely To Go Public in the U.S. Anytime Soon

Mohit Oberoi, CFA - Author
By

Apr. 4 2022, Published 8:38 a.m. ET

In 2021, China-based B2C fashion e-commerce company overtook Amazon to become the most downloaded shopping app. Given the massive revenue Shein gets from the U.S., listing on the stock market there could make sense. Who owns Shein? Could the company IPO in 2022?

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Shein, launched in 2008, sources its clothing from China and sells it around the world. The U.S. is Shein’s biggest market.

Who owns Shein?

Shein, whose parent company is Nanjing Lingtian Information Technology, hasn't released much information about its investors. However, Tiger Global, Sequoia Capital, JAFCO Asia, and IDG Capital are widely believed to be backing Shein.

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shein ipo
Source: Getty Images

Shein was founded by Chris Xu

In 2008, Chris Xu founded Shein, but he didn't name it until four years later. Little is known about Xu’s net worth, though he was reportedly into marketing and search engine optimization before venturing into selling wedding dresses online.

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What’s Shein’s valuation?

During a Jan. 2019 funding round that raised $500 million for Shein, Forbes reported the company was valued at $5 billion. Its valuation was rumored to have jumped to $15 billion in a 2020 funding round, and in 2021, the company was said to be eyeing a U.S. IPO at a $47 billion valuation.

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Shein looking to raise $1 billion at a $100 billion valuation

Bloomberg reports that Shein is looking to raise $1 billion from investors and seeking a $100 billion valuation, which would represent a 20-fold jump in three years. These are eye-popping returns, especially considering the sell-off in U.S.-listed Chinese stocks.

Will Shein IPO in the U.S.?

Shein holding an IPO in the U.S. seems unlikely now, as the company would need to change course. The Holding Foreign Companies Accountable Act has a provision to delist any foreign company that doesn't comply with U.S. Public Company Accounting Oversight Board audits for three years in a row.

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If Shein were to IPO, the U.S. might target Shein for its labor policies and the counterfeit allegations it's facing from several global fashion giants. Little is known about the company’s supply chain policies, including whether it sources from Xinjiang. U.S. investors have also lost faith in China after having lost a lot of money in Chinese stocks.

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China might not target Shein

Given the Didi delisting debacle and China’s tech crackdown, investors are wary of investing in Chinese companies, even amid news that China is reconsidering its overseas listing policy. Shein may not be a major concern for China, either, as it sells globally and creates employment in the country. Also, unlike Alibaba, which has faced antitrust issues, Shein doesn't sell in China.

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