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THREE RAISES AND A FUND

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FASHION

A Shein-y new valuation

Like a drunk airplane pilot, Shein has experienced a dizzying rise to the apex of tech, fashion, and cultural consciousness in recent years. Yesterday, that rise continued after Bloomberg reported that the 14-year-old Chinese retailer was looking to raise at a staggering $100 billion valuation. 

Some perspective: If the $100 billion valuation turns out to be correct, Shein would be worth the same as SpaceX and a couple billion more than Stripe (last valued at $95 billion). That is the rarest of rarefied air in the private markets. Even crazier is that just a few months ago in June, Shein told TechCrunch its valuation was in the “billion-dollar” range as of its last funding round in 2020. That’s a cool 100x in just over a year. Here’s why investors want a piece. 

The Shein magic

• Design: Shein’s designers closely follow social media trends and runway shows to quickly devise new pieces. So quick, in fact, that it has a mountain of lawsuits concerning its potential plagiarism of designs. 

• Production: Shein’s true moat is how nimble its supply chain is. It uses a vast-network of small and responsive workshops in southern China to quickly turn around pieces. 

• Data: Shein focuses on small batches of cheap clothing. Then, if the data shows something is selling well, it will quickly crank up production to meet demand. 

In some ways, Shein mirrors the very platform that drives much of its success and relevancy: TikTok. Just as the TikTok algorithm feeds each video to a small test audience to see if it has viral potential, Shein pilots items with small test runs.

Bottom line: With demand-driven inventory, scary fast turnaround times, and the best supply chain in the world, Shein is a formidable foe in the fashion game. But critics note that even in the shady world of fast fashion, Shein sticks out for egregious environmental issues and worker exploitation. Now, it has a $100 billion target on its back.

FINTECH

Well that was Fast

Fast has been slowing down for a while, but no one expected it to grind to a halt this quickly: as of yesterday, the struggling one-click checkout company is putting it in park for good. That’s bad news for the investors that sunk over $100 million into the startup, but it’s excellent news for newsletter writers who like lazy puns.

If you ain’t first, you’re Fast

Fast generated a sluggish $600k in revenue last year—that’s about 2% of the money brought in by Bolt, Fast’s fiercest one-click competitor. While Bolt marketed its services to large companies, Fast’s strategy of targeting smaller merchants proved to be catastrophic.

• Fast had been hiring people in droves, quintupling its ranks in 2021 to around 500 employees. But paltry revenue and ballooning operating costs pushing $10 million-a-month made quick work of Fast’s $102 million Series B from last year.

• With enough money to stay afloat for just a few more weeks, the company tapped Morgan Stanley in recent days to look for a buyer. Left without any takers, Fast decided to pull out of the one-click checkout race.

Bottom line: Just one question remains—can HBO churn out its Fast limited series in less time than the company was in business? The turnaround on WeCrashed was under 3 years, so it’s possible.

QUICK HITS

Seed Round

Stat: According to Crunchbase, March saw the lowest number of new unicorns since February 2021. Last month’s count of 34 companies reaching a $1 billion+ valuation was down from 49 the previous month and from 60 a year earlier. Unicorns raised a total of $14 billion in March, which is quite a drop from the $26 billion raised in the same month last year.

ICYMI: DropBox is taking on Gumroad and other online marketplaces that allow creators to sell digital content. (TechCrunch)

Rabbit hole: A father-son team solved a geometry problem with infinite folds (Quanta Magazine)

WHAT ELSE IS GOING ON

• Epic Games launched Unreal Engine 5 yesterday, continuing its pursuit of absurdly photorealistic visuals.

• Lexus released teasers of its first electric vehicle and the steering wheel is weird as heck. 

• Affirm is giving job offers to the "vast majority" of Fast engineers.

• Elon parlayed his 9.2% stake in Twitter into a board seat in less than a day.

THREE LIES AND A HEADLINE

Three of these headlines are from The Onion, but one is from a real news outlet. Can you guess which?

A. "San Francisco leads the nation in no one wanting to work in an office"

B. “Panasonic recalls 2 million microwaves that got dirty”

C. “Wes Anderson announces next film will be love letter to Academy of Motion Picture Arts and Sciences”

D. “Tom Brady rips into his nutritional supplements for letting him down in big game”

FOUNDERS CORNER

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THREE HEADLINES ANSWER

A, the San Francisco headline is real. We wouldn’t be surprised if C gives Wes Anderson some ideas, though.