Ultra-fast-fashion giant Shein will invest €250 million ($271 million) in British and European designers and circularity initiatives over the next five years as it prepares for a potential London IPO. The Singapore-based e-tailer plans to launch a €200 million circularity fund for textile-to-textile recycling and set aside another €50 million to help UK and EU fashion businesses join its marketplace and support its Shein X incubator programme.

Shein’s efforts aim to address criticisms and regulatory scrutiny surrounding its rapid growth. The company has reportedly filed confidential papers for a London listing in June, though it has not commented on its plans.

Founded in China in 2012, Shein has become one of the world’s most popular clothing brands, with gross merchandise value reportedly reaching $45 billion in 2023. Its London IPO could be one of the largest stock offerings this year.

Tensions between the U.S. and China disrupted previous plans to list in New York. Shein’s low-cost model has drawn criticism for labor practices, product safety, copyright infringement, and environmental impact.

In Europe, Shein is targeted by proposed regulations addressing fast fashion. The EU aims to close a loophole that allows foreign companies to sidestep import duties and higher fees.

Shein executive chairman Donald Tang emphasized the company’s focus on compliance and circularity, stating, “The tradition and hallmark of Shein is waste reduction.” The company aims to take more responsibility for clothes at the end of their life, leveraging its scale to support innovators.

Shein’s €200 million fund represents a small fraction of its profits in excess of $2 billion last year, but Tang believes it can have a significant impact. He has received “very, very enthusiastic feedback” from the venture community and fund managers.