Exclusive | SHEIN Nears Completion of New Funding Round at Valuation Below $70 Billion

By Qian Ren, Jie Dong

Edited by Jing Liu, Xuan Yang

"An Yong Waves" has learned from multiple sources that Chinese fashion cross-border brand SHEIN is about to close a new round of financing: In addition to existing shareholders such as Hongshan and Tiger Global, new investors include Abu Dhabi sovereign wealth fund Mubadala, General Atlantic, Coatue, and DST. It is believed that Mubadala's investment could reach as high as $1 billion.

According to sources, this round is primarily new share financing, with a post-money valuation between $65 billion and $70 billion. At the end of 2021 and beginning of 2022, SHEIN also completed a financing round of approximately $1.5 billion, led by General Atlantic at that time. Sources previously told us that the initial valuation for that round was indeed $100 billion, later adjusted to around $65 billion.

In other words, after completing this round, SHEIN's post-money valuation will be roughly flat compared to late 2021.

When "An Yong Waves" reached out to SHEIN for comment, the company said the information was "inaccurate." Regarding widespread IPO rumors, SHEIN responded: "There are currently no IPO plans."

SHEIN's new financing comes amid a shifting landscape. Multiple industry insiders told us that Temu, the cross-border e-commerce platform launched by Pinduoduo in September 2022, has already begun squeezing SHEIN in the North American market. At the same time, SHEIN is at a critical juncture of expanding categories and launching a platform model, requiring massive capital support.

According to "An Yong Waves," in the third week of January, Temu's GMV exceeded $50 million, with monthly GMV approaching $200 million — nearly matching its cumulative GMV from four months since launch.

In early February, boosted by Super Bowl advertising, Temu officially entered Canada and will expand into Western and Southern Europe in the coming months. Internally, it has raised its annual GMV target to $3–5 billion and shifted key performance metrics from "user count and order volume" toward "average order value, conversion rate, and retention rate."

A Pinduoduo insider told "An Yong Waves" that when Temu first launched, the internal budget for the business was 7 billion RMB for the coming year (September 2022 to August 2023). But as Temu's growth entered explosive phase, this budget ceiling was recently doubled.

This has put considerable pressure on SHEIN. Since its founding, the fashion giant has been notoriously secretive about revenue and especially profit figures. But according to the Financial Times and other sources, SHEIN recently disclosed to investors in a document that its 2022 revenue reached $22.7 billion with profit of $700 million — down from $1.1 billion in 2021, but marking four consecutive years of profitability. Soaring logistics costs, pandemic-driven production costs, and rising customer acquisition expenses significantly squeezed SHEIN's net profit last year.

The same document revealed SHEIN's 2025 targets: $58.5 billion in revenue, $7.5 billion in net profit, and GMV growing to $80.6 billion — the former figure meaning it would surpass the combined annual sales of rivals H&M and Zara.

In the eyes of many industry insiders, these targets are overly ambitious. A cross-border e-commerce practitioner told us, "$7.5 billion in net profit means SHEIN needs to achieve 10x profit growth in three years — an enormous challenge given current market conditions."

"Temu's emergence has stirred up what appeared to be calm waters in cross-border e-commerce. The show is just getting started," another veteran industry figure told "An Yong Waves." Looking at both businesses, while their current user profiles differ considerably, future overlap and conflict cannot be ruled out.

Common ground: Both are backed by China's powerful supply chain; both target the low-price market; both are expanding into full categories and new global markets. Points of conflict: SHEIN is extending into beauty, home goods, pet supplies, women's lingerie, menswear, children's clothing, and more, while launching an Amazon-like platform. Temu started with general merchandise but has now made apparel a strategic category, testing the waters in North America — directly encroaching on SHEIN's home turf.

Notably, after landing in North America, Temu continued Pinduoduo's advantage in value-for-money products and social裂变 marketing tactics. In competing for users, it adopted the simplest, most direct approach — price wars. For instance, in Temu's discount section, many products are priced below $0.90.

Temu's sudden rise cannot be underestimated. According to SensorTower's latest statistics, as of late January, Temu's global downloads approached 20 million, with transaction users exceeding 10 million, over 90% of which came from North America. This means Temu successively surpassed Amazon, Google, TikTok, and SHEIN to top the North American iOS free app download charts.

However, SHEIN is preparing to strike back. For example, SHEIN earlier changed its independent site's "consignment model" in Brazil to pilot a "platform model," building a comprehensive platform similar to Taobao. Last year, SHEIN's Brazil market GMV already accounted for 3% of total GMV, nearly $1 billion.

Now SHEIN is expanding this platform model from Brazil to Mexico, the US, and the Middle East. A few weeks ago, SHEIN also announced the appointment of Marcelo Claure as Chairman of Latin American operations — previously a key lieutenant to SoftBank's Masayoshi Son and former SoftBank COO. His addition is seen as a major move in SHEIN's push into the Latin American market, and also signals SHEIN's hunger for second-curve growth.

The ultimate ideal of Chinese cross-border e-commerce companies is undoubtedly to build a full-category mega-platform. From this perspective, a future showdown between SHEIN and Temu is inevitable.

Image source | Visual China

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