As Sequoia Capital China-backed Shein nears a long-awaited IPO in the U.S., the hurdles it’s facing continue to stack up. The latest is the anticompetitive lawsuit that Chinese e-commerce platform Temu filed against the company just earlier this week, accusing Shein of orchestrating a “scheme” to block Temu’s growth in the U.S.
In the 100-page complaint, which was filed on Wednesday in a Washington, D.C. district court, Temu accused Shein of a whole number of anti-competitive practices, alleging that Shein “improperly seizes” its suppliers’ IP rights, sometimes without their knowledge, to prevent them from listing or selling similar products with Temu, and accusing Shein of “detaining merchant representatives” in its offices for “many hours” and threatening them with penalties for doing business with Temu, among other things, according to the court filings.
A Shein spokeswoman told Fortune that Shein believes “this lawsuit is without merit and we will vigorously defend ourselves.”
This isn’t the first time that Temu and Shein have gone toe-to-toe in court. The companies had previously traded lawsuits, with Temu alleging that Shein was bullying manufacturers and Shein alleging that Temu was telling influencers to make disparaging remarks about Shein. (Both companies dropped their respective lawsuits in October.)
A Temu spokesperson told Fortune that, while the company had dismissed earlier litigation against Shein, Shein’s “anticompetitive behavior has not only persisted but intensified,” they said, adding later: “Their actions are too exaggerated; we had no choice but to sue them.”
Temu clearly is not looking to pull any punches in its latest claim. Here’s a particularly potent line from the lawsuit: “Shein’s business model is based on copying trendy designs, using its network of thousands of captive suppliers to manufacture copies of those designs, and reselling the copy with a Shein label attached. Shein is not a brand; it is a glorified label maker.” (A Shein representative didn’t respond to a request for comment on the claim)
Prior to this latest litigation, Shein already had its work cut out for it ahead of potential listing (and the company previously had declined to comment on a potential IPO). As I’ve written about earlier, Shein has made many enemies in Washington, D.C. And both Shein and Temu have been the target of an ongoing investigation by a new House Committee set up earlier this year.
Did you miss me? I spent the last week in Berlin and Dresden, Germany, wandering through the Christmas markets and drinking Glühwein to keep me warm. Here’s a photo of the enormous stollen at Dresden Striezelmarkt:
Now that I’m back, here are some of the things I’m catching up on:
—Blackstone’s hilarious new Taylor Swift-themed holiday video.
—The new team of lobbyists Paradigm started working with
—Why Boston-based venture firm OpenView collapsed
Crystal Ball…I am still taking predictions until mid-next week. Any Term Sheet reader can make a prediction for what next year will bring for private equity, M&A, and venture capital for the 2024 Crystal Ball edition. Send me an email at the address below. Please make sure to include “Crystal Ball” in the subject line so I don’t miss it.
Until Monday,
Jessica Mathews
Twitter:@jessicakmathews
Email: jessica.mathews@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.
VENTURE DEALS
- Urban Sports Club, a Berlin, Germany-based sports and wellness membership program for activities across Europe, raised €95 million ($104.4 million) in funding. Verdane led the round and was joined by HV Capital and others.
- Qogita, a London, U.K. and Amsterdam, Netherlands-based procurement platform for wholesale products, raised €80 million ($87.7 million) in Series B funding. Dawn Capital led the round and was joined by Accel and others.
- ecoworks, a Berlin, Germany-based company that retrofits apartment buildings for NetZero standards, raised €40 million in funding. World Fund led the round and was joined by Haniel, KOMPAS VC, and ISAI.
- Meniga, a London, U.K.-based provider platform designed to help banks improve their digital banking offerings, raised €15 million ($16.5 million) in Series D funding from Groupe BPCE, Crédito Agrícola, and others.
- CurbWaste, a New York City-based provider of software for waste services management, raised $10 million in Series A funding round. Flourish Ventures led the round and were joined by TTV Capital, Mucker Capital, and B Capital.
- Lolli, a New York City-based bitcoin and cashback rewards company, raised $8 million in Series B funding. BITKRAFTVentures led the round and was joined by Sfermion, Prisma Ventures, Hypersphere Ventures, and others.
- Arbonics, a Tallinn, Estonia-based platform designed to calculate the carbon removal potential of land, raised €5.5 million ($6 million) in seed funding from NordicNinja, Plural, and Tilla Impact Ventures.
- Arcane, a London, U.K.-based AI copilot for digital marketers, raised $5 million in seed funding. Accel led the round and was joined by others.
- SupportPay, a Charlotte, N.C.-based child support management and payment platform for co-parents, raised $3.1 million. HearstLabs led the round and was joined by Michigan Capital Network, Victorium Capital, Rendar Capital, and others.
- ANNEA, a Hamburg, Germany and Lisbon, Portugal-based automation platform for renewable energy infrastructure, raised $2.9 million in seed funding. Voyager Ventures led the round and was joined by Innoport and Faber Ventures.
- Maka, a Lagos, Nigeria-based fashion and beauty e-commerce platform, raised $2.7 million in pre-seed funding. 4DX Ventures and Janngo led the round and were joined by Palm Drive Capital and others.
- Cadenza Bio, a Oklahoma City, Okla.-based biotech company developing therapeutics for demyelinating and inflammatory diseases, raised $2.4 million in seed funding. Plains Ventures led the round and was joined by Oklahoma Life Science Fund, Cortado Ventures, Boyd Street Ventures, and Illinois Ventures.
PRIVATE EQUITY
- Castle Harlan acquired Baja Aqua-Farms, a Baja California, Mexico-based Bluefin tuna rancher. Financial terms were not disclosed.
- CES Power, backed by Allied Industrial Partners, acquired Roundrock Technology, a Raleigh, N.C.-based provider of IT services to the entertainment industry. Financial terms were not disclosed.
- Hg acquired a majority stake in CINC Systems, a Duluth, Ga.-based provider of accounting, management, and operations software for community association management companies. Financial terms were not disclosed.
- Investcorp acquired a minority stake in Outcomes First Group, a Bolton, U.K.-based education provider to young people with autism, learning disabilities, and other special education needs. Financial terms were not disclosed.
- TeamSnap, backed by Waud Capital Partners, acquired MOJO Sports, a Los Angeles, Calif.-based youth sports media platform. Financial terms were not disclosed.
- The Rise Fund acquired a majority stake in Outcomes First Group, a Bolton, U.K.-based education provider to young people with autism, learning disabilities, and other special education needs. Financial terms were not disclosed.
EXITS
- Bain Capital acquired Guidehouse, a McLean, Va.-based provider of consulting and managed services, from Veritas Capital for $5.3 billion.
- Ally Waste Services, backed by RF Investment Partners, acquired Waste Consolidators, a Phoenix, Ariz.-based provider of bulk waste collection services. Financial terms were not disclosed.
- Thoma Bravo acquired a majority stake in BlueMatrix, a Durham, N.C.-based content creation and distribution platform for investment research providers. Financial terms were not disclosed.
- Thoma Bravo acquired a majority stake in Hypergene, a Malmö, Sweden-based provider of corporate performance management and project & portfolio management software, from Monterro and other minority shareholders. Financial terms were not disclosed.
- TruArc Partners acquired a majority stake inWatchtower Security, a St. Louis, Mo.-based provider of video surveillance and asset protection solutions. Financial terms were not disclosed.
OTHER
- Cognizant Technology Solutions Corporation agreed to acquire ThirdEra, a Broomfield, Colo.-based solutions provider for the ServiceNow platform. Financial terms were not disclosed.
- Sandbrook Capital, a Stamford, Conn.-based private equity firm, raised $1.5 billion for its first fund focused on companies advancing climate infrastructure.
- Playground Global, a Palo Alto, Calif.-based venture capital firm, raised $410 million for its third fund focused on deep tech companies.
Correction, Dec. 17. 2023: The online version of this newsletter has been corrected to reflect that Playground Global raised new capital for its third deep tech fund, not its second.
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