Shein’s blockbuster IPO is coming soon—expect $100B+ valuation
Shein’s blockbuster IPO is coming soon—expect $100B+ valuation
The fast-fashion company plans to go public in America in 2024, there will be huge numbers and plenty of twists and turns
Welcome back,
This week is all about Shein and reports that it has filed for an IPO in the US. That listing is likely to be a blockbuster. Shein was valued at $100B by private investors a couple of years ago and, while its valuation dropped when it raised its most recent round earlier this year, those investors will be looking for a meaningful return so we can expect a target IPO price of well above $100B. It remains to be seen, of course, whether such a figure would fly in this current market.
Elsewhere, there’s details on how Huawei surprised the world with a China-only chip that performs (despite US sanctions), we learn more about why Alibaba’s cloud unit isn’t spinning out and going public (hefty valuation) and the other reads include a detailed essay on the challenges of Foxconn building iPhones in India.
All that and more in this week’s newsletter.
See you next week for more,
Jon
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News in focus
Shein’s blockbuster IPO is coming soon
A blockbuster IPO is on the horizon after Shein, the fast-fashion e-commerce company, reportedly confidentiality filed to go public in the US.
There’s no word on the financials at this early stage, but the company was valued at $66B by investors when it raised its last round earlier this year. That was a $2B round but remarkably the valuation was one-third lower than the $100B valuation it landed in 2022 when it raised $1B. That gives you an idea of the type of valuation it might be shooting for when it comes back.
Before then, though, there will be plenty to navigate.
Principally, you’re sure to hear a lot more about allegations of forced labour in the company’s supply chain. (Remember the misguided influence tour from July, when there were strong rumours of an impending IPO?!)
We are likely to get a lot more clarity on the company’s financial performance. Here’s what we’ve heard so far:
$23B in revenue and $800M in net profit in 2022
$10B revenue in 2020
$5B revenue in 2019
Over 10,000 employees
The company is actually 15 years old, it has just come alive in the last few years
An interesting comparison is Pinduoduo, the parent of Temu, which has seen its stock price nearly triple over the last two years to reach a $193B market cap—PDD just beat earnings estimates and its market cap is close to Alibaba’s
There will also be a focus on reclusive Shein founder Sky Xu (who resides in Singapore)
Finally, The Information—which has a track record of Shein scoops—reports that Shein is facing an “uphill battle” to keep growing. The firm has a bold plan to rival Amazon by offering faster shipping and a more diverse selection of products, but so far that hasn’t yielded much progress, the outlet reports.
How Huawei surprised with chip tech
A look at the story behind the Kirin 9000S chip, the Huawei-SMIC chip that impressed when it was revealed earlier this year:
Despite the obstacles, the Kirin 9000S offered performance comparable to one- or two-year-old chips from Qualcomm, according to various testing teams.
The Mate 60 flew off the shelves in China, and the return of Huawei chips following years of sanctions was enthusiastically applauded by nationalists and tech fans.
In the US, confusion reigned about how Huawei had overcome sanctions to produce the chips. Jake Sullivan, US national security adviser, said that America needed to get “more information” about the Kirin 9000S.
Why Alibaba’s cloud unit fell down to earth
The Information dives deep into why Alibaba’s cloud unit, valued at $40B, aborted a highly-anticipated IPO
Alibaba’s idea was that the outside investments could signal to the stock market the appeal of the cloud unit ahead of its public debut. The plan flopped. Investors balked at the valuation Alibaba sought. They were conscious that the cloud business—though the biggest of its kind in China—was barely growing and was also losing money.
One international investment firm, for example, was only willing to offer a valuation of less than $25 billion for the unit. The episode underlined for Alibaba executives the fact that the spun-off cloud unit would not be well received by the market, contributing to the company’s decision announced last week to cancel the move.
China
ByteDance plans to wind down its Nuverse gaming brand and retreat from mainstream video games—cutting 1,000 jobs link
The company will discontinue games that have yet to launch, except for a few innovative projects, one source said, adding that ByteDance will continue to operate titles already available as it seeks to divest them.
Nvidia CEO says US needs 10-20 years to reach chip supply chain independence—but he also reaffirmed Nvidia’s commitment to China, the world’s largest market for chips link
China’s 5Y Capital is on track to surpass its target of raising $700M for a closely watched venture fund link
Huawei will move core technologies and resources from its smart car unit, which is performing with promise, into, to a new joint company owned up to 40% by automaker Changan Auto link
That JV is raising funds from investors at a valuation of 250B yuan (or $34.67B) link
Food delivery firm Meituan's Q3 revenue beats estimates and it has now launched a $1B buyback initiative link
AI firm SenseTime has refuted a short-seller report alleging it falsified revenue numbers link
China has tried to keep kids away from social media but now reports suggest cheap smartphone prices and addictive apps like Douyin have hooked the elderly instead link
A Beijing court has ruled that that AI-generated content can be covered by copyright—a decision that could have far-reaching implications on the tech’s use link
India
A fascinating and deep look into how Chinese firms like Foxconn have fared bringing iPhone factory culture to India, which is now jointly producing the iPhone alongside China—including lots of struggles and cultural adjustment link
Although Chinese workers today still deal with frequent overtime and constant pressure, their food, living conditions, and health care have improved, said Chan from Hong Kong Polytechnic University. But sleep-deprived women fainting and missing periods was common during the early years of China’s manufacturing boom as well, according to labor scholar Pun Ngai’s book Made in China: Women Factory Workers in a Global Workplace.
Still, the factories’ relatively high pay, combined with an escape from village life and parental control, made the job worth it. The same is now happening in Chennai. Female workers at the factory told Rest of World that, as the main breadwinners, they are now able to convince their parents to delay marrying them off. Two iPhone assembly line workers told Rest of World they were using their income to build homes back in their villages.
Hon Hai, Foxconn’s parent, is planning a $1.6B package to massively expand its presence in India link
HCL is inching closer to securing a chip unit in Karnataka, with the investment estimated at $400M link
Alipay plans to sell its 3% stake in Zomato for nearly $400M link
Prosus slashes the valuation of India’s Byju’s to below $3B—it was previously as high as $22B link
Meanwhile, top shareholders at Byju’s have demanded the company meet certain conditions before they consider any future fundraising link
Founder Byju Raveendran has pledged his home as well as those owned by his family members to raise money for paying employees as the company battles a cash crunch link
EMotorad raised $20M for a global push for its e-bikes link
Fintech PhonePe is set to launch consumer lending by January 2024 link
Ola Electric, which has sold some 338,000 e-scooters in 2 years, is struggling to handle repairs and maintenance and other infrastructure to keep pace with its success link
Payment solutions provider PhiCommerce raised $10M led by Beenext link
Amazon India is reshuffling its top leadership, its biggest change since launching in India 10 years ago link
Southeast Asia
The Philippines' SEC is blocking access to Binance for failure to register in the country and secure requisite licences link
Inflow raised $2M to connect small fashion brands with manufacturers in Vietnam link
State media in Indonesia reports that TikTok is working to obtain an e-commerce permit after having its e-commerce feature forcibly removed in the country due to regulations link
Crypto derivatives protocol MYX raised $5M at a valuation of $50M link
Singapore’s FEBE Ventures launches its second fund at $75M link
Climate Alpha, a Singapore-based provider of AI-driven analytics for real estate, asset management and insurance, raised $5M link
Wind, a crypto-based cross-border remittance and payments service started by the founders of Pathao, raised $3.8M link
Game studio Matr1x raised $10M to finance an upcoming NFT mobile shooter link
Singapore and Indonesia-based Fr8Labs, which digitises freight forwarding, raised $1.5M link
Neobank iPeakoin raised close to $10M in a Series A link
Jakarta-based Gravel closed $14M to support Indonesia’s construction industry link
Rest of Asia
A look at Rakuten Mobile, the e-commerce firm’s mobile arm, which has shaken Japan’s mobile market by offering cheaper and more flexible pricing but has reached just 2.5% market share and cost the market company significantly—with Rakuten posting 14 consecutive quarters of losses: adding up to losses of 819B yen ($5.5B) link
Sri Lanka tech workers demand pay in dollars or euros after rupee crashes link
Hong Kong has launched a probes into an alleged $15.4M crypto scam by Hounax link
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