IPO valuation: $66 billion to $90 billion
In early December, it was revealed that Chinese digital fashion business Shein had filed confidential paperwork with the United States Securities and Exchange Commission to go public, likely in early 2024. Bloomberg reported that it is seeking for a valuation of up to $90 billion, up from approximately $66 billion in a financing round in May.
Shein is rewriting the book on going public, relying on its social media presence rather than strong financials or deep-pocketed investors to generate demand for its stock. The company has approximately 31 million Instagram followers, with many of them being younger consumers drawn to the online retailer’s inexpensive costs and unique design alternatives.
Drawing a line through the ultra-secretive firm’s financials is difficult, but the Wall Street Journal claimed earlier this year that Shein earned $23 billion in 2022 revenue and $800 million in net income, placing the company top in the fashion sector sales volume rankings. The success of a first public offering will be determined by how well it continues to perform.
“Those numbers set high expectations for its IPO,” says Seth Farbman, chairman and co-founder of Vstock Transfer, an SEC-registered stock transfer service. “Despite concerns about environmental impact and allegations related to sourcing cotton from Xinjiang, Shein’s success could be a bellwether for other fashion companies considering IPOs in 2024.”