The low-cost clothing retailer, which wants to list in London this year, will back European sustainable fabric companies through the fund.
Donald Tang, executive chairman, Shein Group. Image courtesy of Wikipedia.
Singapore-headquartered, China-originated fast fashion ecommerce group Shein is launching a €250m ($271m) circularity fund to back companies in the UK and other European countries, Reuters reported today.
Founded in 2008 as ZZKKO, Shein is best known for its low-cost clothing and cosmetics and became a global household name during the Covid-19 pandemic. It was last valued at $66bn in January last year and logged $2bn in profits for 2023.
The planned CVC fund will target recycled materials technology startups in the UK and the European Union in a bid to reduce fashion waste. It may also invest in growth-stage companies working on sustainable fabrics.
Corporate venturing activities in Europe are set to begin as soon as possible, Donald Tang (pictured), executive chairman of Shein Group, told the Financial Times yesterday.
“Our financial resources, our scale and leverage [mean] we can be, and we will be, a significant guinea pig or applicator of these technology or processes,” he was quoted as saying by the FT.
The move comes as a number Asian companies increase their investment into sustainability ahead of becoming subject to the EU’s sustainability reporting requirements next year.
Shein earmarked an additional €50m ($54.1m) to back partner brands, designers and artisans across the UK and the EU, in addition to potential investments in research and development initiatives or a pilot factory in the region.
The news came in the wake of Shein confidentially filing last month to list on the London Stock Exchange sometime this year after a failed IPO attempt in New York due to forced labour allegations in Xinjiang.
Jonathan Reynolds, the UK’s business and trade secretary, said Shein would need to meet “ethical and moral targets” on “all aspects of business” if it goes public in London. China Securities Regulatory Commission has yet to approve Shein’s flotation abroad.
