The fast-fashion retailer Shein is considering lowering the cost of investment for some late-stage investors as it pursues an IPO in Hong Kong at a lower valuation.
According to filings with the Hong Kong Stock Exchange, Shein has agreed to give investors in its Pre-D, D, and D+ funding rounds a guaranteed cash payout on their original investment. This payout is equal to an 8 per cent annual return, totaling approximately $1.1 billion.
Total estimated guaranteed cash payout for Pre-D, D, and D+ investors.
The guaranteed cash payout for Pre-D, D, and D+ investors will be made in three equal payments. These are due by the end of March, June, and September 2026, calculated from the date of their initial investment until March 4, 2026.
Shein may offer a combination of these cash payouts and additional Class B shares to investors in its pre-Series D, Series D, and Series D+ funding rounds. Investors with preferred shares will automatically convert into regular Class B shares upon listing, with a conversion price adjusted downwards to compensate for lower pricing.
Bloomberg News reported that these adjustments aim to reduce the cost base for certain investors to reflect a valuation of around $40 billion, aligning with Shein's anticipated IPO valuation. A source with direct knowledge of the matter told Reuters that Shein is seeking up to $50 billion in valuation in its upcoming IPO.
Valuation and Financial Performance
Shein's valuation fell from $98.2 billion in a 2022 fundraising round to $64 billion in a 2023 round.
Investors are expected to scrutinize Shein's sought valuation of $40 billion to $50 billion in a Hong Kong IPO due to slowing growth, a sharp decline in profitability, and rising regulatory and legal uncertainties.
Shein reported a $99 million net loss in the first three months of the year, compared to a $395 million net profit in the same period of 2025.
