Shein is considering lowering the investment cost for some late-stage backers as the fast-fashion retailer prepares for a Hong Kong IPO at a valuation of around US$40 billion, Bloomberg News reported, citing people familiar with the matter.
The company may offer a combination of cash payouts and additional Class B shares to investors from its pre-Series D, Series D and Series D+ funding rounds, according to the report. The proposed adjustment would align their investment cost with the valuation expected for the IPO.
Discussions remain ongoing and no final decision has been made. The amount of cash and shares offered would depend on the valuation secured when Shein goes public, Bloomberg reported.
The potential reset comes after Shein reported a US$99 million net loss for the first three months of the year, a sharp reversal from a US$395 million net profit in the same period last year.
The results have raised questions over whether the valuation Shein is seeking can be justified as it pushes ahead with plans for a Hong Kong listing.
Shein did not immediately respond to a Reuters request for comment, while Reuters said it could not independently verify Bloomberg’s report.
