4 minute read
High-flying Allbirds
Men’s Wool Piper Mids $120 allbirds.com
TRENDLINES
Advertisement
Celebs, consumers and investors are flocking to Allbirds, a footwear unicorn made from sheep By Mike Reddy
Before Allbirds appeared on the Nasdaq, its shoes appeared on the feet of Paul McCartney, Matthew McConaughey, Jennifer Lawrence and former President Barack Obama, to name just a handful of its celebrity clientele. But as the company’s footwear grows more common, its business model remains anything but.
The customers who sport any of the more than eight million pairs of Allbirds shoes sold since their 2016 debut probably didn’t discover them through advertising, and they definitely didn’t stumble upon them in chain shoe stores.
That’s because at least 60% of the company’s business is driven by word-of-mouth marketing, according to Footwear News. And if that weren’t contrarian enough, Allbirds was launched with a direct-to-consumer sales model powered by e-commerce—something virtually unheard of for brands whose products depend on perfect fits.
Since then, the company has built a brick-and-mortar presence, opening its first stores in 2017. From its headquarters in San Francisco to locations in Tokyo, Allbirds now has
Leonardo DiCaprio 35 stores scattered across the world. That said, with roughly 89% of its revenue coming from internet sales last year, Allbirds’ primary customer base irrefutably remains where it started: online.
For what’s now a multi-billion-dollar footwear industry disruptor that defies all expectations, it’s only fitting that the Allbirds origin story is comparably unconventional. If it weren’t for 970 backers on the crowdfunding website Kickstarter, the shoe brand might never have taken off.
New Zealander Tim Brown, a former professional soccer player and the co-founder of Allbirds, launched the pivotal Kickstarter campaign in early 2014 with the goal of creating natural, anti-bacterial and anti-odor wool shoes. The idea was to make them with merino wool, an especially fine and soft type of wool said to be stronger— yet feel lighter—than cotton. The campaign was aptly named “The Wool Runners: No Socks. No Smell.”
With a $30,000 funding goal, the project raised over $100,000 after just five days.
Barack Obama Jennifer Lawrence Matthew McConaughey
Following the campaign’s success, Brown teamed up with Joey Zwillinger, a San Francisco-based biotech engineer and renewable materials expert, and together the duo officially founded Allbirds in 2015. The company name, Brown told CNBC, pays homage to New Zealand and its early settlers. Legend has it that upon recognizing a distinct lack of mammals on the Kiwi landmasses, explorers called it a land of all birds.
It didn’t take long for investors to take notice of the innovative shoe-selling startup. The company attracted the attention of Seattle-based venture capital firm Maveron, which led its $7.25 million Series A funding round in 2016—the same year Time magazine called Allbirds “the world’s most comfortable shoes.” Things snowballed from there.
ALLBIRDS’ WINGSPAN
⊲ January 2014 Kickstarter campaign ⊲ July 2015 Allbirds founded ⊲ September 2016 $7.3 million Series A funding round ⊲ April 2017 First store ⊲ October 2018 Unicorn status ⊲ November 2021 Nasdaq debut
Last year, roughly 89% of Allbirds’ revenue came from internet sales.
In five different funding rounds from 2016 to 2020, the company raised more than $200 million. During that venture capital bonanza, Allbirds joined the unicorn club in 2018, a distinction reserved for private companies that reach valuations of $1 billion.
In that same year, Leonardo DiCaprio drew more eyes—and ink— to Allbirds’ shoes when he announced he was investing in the company.
“Allbirds is on the forefront of developing new materials that will serve as a model for the footwear industry,” DiCaprio said in a statement. “This kind of innovation is crucial for creating a more sustainable future. I am proud to join the company as an investor.”
Last November, Allbirds procured the suitable ticker symbol BIRD and IPOed on the Nasdaq, opening up the investment opportunity to the public. After an initial surge in the market, the company reached a valuation of more than $4 billion.
Only time will tell what’s ahead for Allbirds now that it’s a publicly traded company. It may continue its ascent to the heavens, or it could fly too close to the sun. But with more than eight million pairs sold, Allbirds isn’t going anywhere anytime soon.
Listen Here
Truth or Skepticism
Tom Sosnoff, entrepreneur, options trader and co-CEO of tastytrade, joins Dylan Ratigan, businessman, author and former host of MSNBC’s The Dylan Ratigan Show, for a weekly podcast covering everything from sports and investing to politics and monetary policy. One’s an iconoclast, and the other’s a contrarian. Tune in each week find out who is who. It’s unscripted and unpretentious—some like to think of it as rants, but refined.
The Prediction Trade
If you can trade it, or bet on it, you can bet they will talk about it on The Prediction Trade—the only podcast for gamblers, traders, investors, math freaks, data geeks and superforecasters devoted to the intersection of probability, prediction and profit. Each episode features expert guests with proprietary forecasting models and insights into the outcomes of prediction market events. So whether you live to bet or bet to live, check out the next episode of The Prediction Trade.
