Shein valuation drops by a third despite raising $2bn

Shein, the online fashion company that won over millions of American shoppers during the pandemic, raised $2 billion in its latest fundraising round that values the company at $66 billion, about a third less than a year earlier, according to people close to the company, reports The Wall Street Journal. The online-only retailer, which was founded in China and is now based in Singapore, cut its valuation after tech-company share prices have come down. The company also faces intensifying pressure from US lawmakers on its labor and environmental practices.

Shein generated $23 billion in revenue last year, the people said, closing in on European rivals H&M Hennes & Mauritz and Zara owner Inditex, and its net profit was $800 million. Shein has set a target to grow its revenue by 40% this year, the people said.

Before the latest fundraising which closed last week, Shein was last valued at $100 billion a year ago, catapulting its worth to be more than the combined market capitalization of H&M and Inditex. At the time, tech companies were flush with cash and investors have been betting on cashing in eventually when Shein goes public.