Kiwi sustainable shoe company Allbirds is preparing to debut on Wall Street through an initial public offering which could value it at more than $US2 billion ($2.72 billion).
The direct-to-consumer woollen shoe brand has cult status in its native New Zealand where its sneakers are worn by Prime Minister Jacinda Arden and in Silicon Valley, where venture capitalists and startup founders team the sneakers with their Patagonia jackets. Devotees of Allbirds shoes range from Google co-founder Larry Page to actor and Allbirds investor Leonardo DiCaprio.
Allbirds has filed an S-1 to list on the tech-dominated Nasdaq exchange in an application which revealed high growth but also widening losses at the company.
Allbirds lost $US14.5 million in 2019, which widened to $US25.9 million in 2020, according to the S-1 filed with the Securities Exchange Commission (SEC). However, the company’s revenue continued to grow from $US193.7 million in 2019 to $US219.3 million in 2020.
Online sales made up 89 per cent of Allbirds total sales with more people shopping online due to the COVID-19 pandemic. The company has also benefitted from the shift towards casual dressing.
Last year Allbirds raised $US100 million in a funding round that valued the company at $US1.7 billion. While the startup has listed the size of its offering as $US100 million, that figure is just a placeholder and will change when the terms of the share sale are set, with reports Allbirds is seeking to be valued at $US2 billion or more.
The company was started in New Zealand by Joseph Zwillinger and Timothy Brown in 2015 with the pair launching a Kickstarter campaign a year later for “Wool runners: No socks. No smell” which raised $120,000.
Mr Brown came up with the idea of using wool to make shoes when he was a professional footballer for the Newcastle Jets in Australia and Wellington Phoenix in New Zealand and teamed up with former clean-tech entrepreneur Mr Zwillinger.
“Coming from New Zealand, the land of the sheep I saw an opportunity, in wool, this miracle fibre that had been either overlooked or, you know, maybe it was just a really bad idea,” he told The Age and The Sydney Morning Herald in a previous interview.
Allbirds wasn’t an instant success selling just one shoe in its first year of operations, but gradually it gained traction by using social media to build its brand and circumventing the traditional footwear sales model by selling direct to customers online.
It has now expanded beyond shoes into clothing, with the launch of a range of socks and activewear made from wool and eucalyptus fibres.
Nick Crocker, partner at venture capital firm Blackbird Ventures, said for Allbirds to have started out on Kickstarter and then five years later to have filed to go public on the Nasdaq was an amazing achievement.
“As a brand I think they have executed superbly, and they have built obsessive love among their customers which is never a fluke,” he said. “You don’t accidentally build that kind of customer love at scale, you build it with sustained effort, and quality over a long period of time.”
As a B-Corp certified business, which requires compliance with social and environmental standards, Allbirds’ S-1 sets out its plans for the listing to be a “sustainable public equity offering” or “SPO”.
“The more sustainable we are, the better we believe our products and business will be,” the document states. “We are proud of the alignment of financial and environmental benefits from our work, and that we are able to serve as a driving force in a new age of sustainable enterprise.”
A spokeswoman for Allbirds said she was unable to comment because of SEC restrictions.
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