The cornerstone of this investment is the creation of the Circularity Fund, which will be launched with a capitalisation of €200 million (~$216.72 million). This fund is designed to support start-ups and businesses across Europe and the UK that are developing next-generation technologies and solutions aimed at enhancing circularity in the fashion industry. The fund will support start-ups working on innovations in textile-to-textile recycled materials and related areas, providing essential early-stage investment. Additionally, Shein plans to enter into offtake agreements and other partnerships with more mature start-ups that have existing production capacities in textile recycling or are working with new, preferred fibres, the retailer said in a press release.

Donald Tang, Shein’s executive chairman, said: “As a global leader in our sector, Shein has both a responsibility and an opportunity to accelerate innovations that can address the environmental footprint of the fashion industry. The Circularity Fund will build on our support for entrepreneurs and businesses at the forefront of innovation in circular initiatives, with a focus on supporting entrepreneurship and innovation in the UK and the EU, where some of the most exciting work in this space is taking place. In addition to funding early-stage startups exploring new technologies, we also intend to invest in more mature start-ups in this space that have commercialised their innovations and are ready to scale up. Given Shein’s scale and reach, Shein can become a catalyst for the widespread adoption of these solutions across the industry.”

Shein's investment also extends its existing partnerships within the fashion industry, in alignment with its evoluShein Roadmap, a comprehensive sustainability strategy. Notable initiatives include the collaboration with Queen of Raw to source surplus or ‘deadstock’ fabrics, preventing these materials from ending up in landfills or incinerators. These materials are now used to create new Shein garments, facilitated by the integration of Queen of Raw’s Materia MX software into Shein’s sourcing system. Moreover, Shein is increasing the adoption of innovative denim printing technology among its suppliers, significantly reducing water usage compared to traditional methods. In collaboration with academic institutions, Shein is also working on achieving commercially scalable production of recycled polyester fibres through chemical recycling, with successful experimental results already achieved.

The remaining €50 million of Shein's commitment will support brands, designers, and artisans across the UK and EU, helping them grow their online businesses through Shein’s marketplace services. This includes funding to bring more UK and European designers into the Shein X Designer Incubator Program, enabling them to commercialise their designs through Shein's extensive resources. Additionally, a dedicated initiative will be created to help UK and European businesses onboard onto Shein’s Marketplace platform, providing access to Shein’s global customer base.

Tang added: “All across Europe and the UK we have identified a rich and diverse pool of designers, brands, and craftspeople who we know can reach a much wider audience on our platform and who we are confident can successfully scale up their businesses with Shein.”

Shein is inviting businesses, financial institutions, and sovereign wealth funds globally to co-invest in the Circularity Fund, further amplifying the impact of these initiatives, the release added.

Fibre2Fashion News Desk (KD)