Sneaker Startup Allbirds Files for IPO

BY DAVE SEBASTIAN

Sneaker maker Allbirds Inc. has filed for an initial public offering as the company said it aims to benefit from physical retail’s recovery from the Covid-19 pandemic.


The San Francisco-based startup, known for its ecofriendly sneakers, has seen its shoes grow in popularity among people working in the tech industry.


Allbirds had 27 stores as of June 30, including in New York, Shanghai and Berlin, it said Tuesday. In 2020, the company’s digital channel represented 89% of sales, according to a securities filing.


The company says it is a vertical retailer, meaning it can control its own inventory and product flow. Allbirds plans to increase its store fleet, expand within existing international markets and increase its digital efforts.


Allbirds posted a net loss of $25.86 million for 2020, wider than the $14.53 million loss in the prior year as it booked higher costs associated with headcount, operations and digital advertising. Net revenue rose to $219.3 million from $193.7 million, driven by increases in average order value and the company’s digital sales.


The company said the revenue growth was partially offset by a 25% decline in its physical-retail channel, largely due to store closures during the pandemic.


Store reopenings have improved its performance, but 2021 same-store sales as of June 30 remained below 2019 levels, Allbirds said.

Broadly, Allbirds said it plans to use net proceedsfrom the offering to fund its working capital, operating expenses, capital expenditures and other purposes.


The company said it also could use part of the proceeds to acquire or invest in complementary businesses, products, services or technologies.

The company in August said it is launching a new line of athletic gear made of merino wool and yarn created from the pulp of eucalyptus trees.

The fabric, which was two years in the making, is the

company’s latest attempt to rethink the apparel industry’s longstanding reliance on polyester and other synthetic fibers.


Allbirds is also bringing its sustainability focus to the IPO. In going public, the company said it is committing to a framework centered around environmental, social and governance criteria.

Among Allbirds’s commitments is to report progress on policies or programs to address its most material environmental issues, such as land, chemical and energy use.

The company said it has experienced a significant disruption in the supply of raw materials, among other risks related to its supply chain.


“These issues and risks are increased as a result of our commitments to sustainability, including our use of specific materials and manufacturing processes and the sustainability and ESG-related requirements we impose on our suppliers, which generally limit the number of suppliers who could potentially satisfy our requirements,” Allbirds said. Last year, Allbirds raised $100 million in Series E funding. At the time, the funding valued Allbirds at $1.7 billion, according to a person familiar with the terms.


The company’s existing investors include Franklin Resources Inc., Rockefeller Capital ManagementLP,

Baillie Gifford & Co. and For Good Ventures LLC, according to FactSet.

The company said it has applied to list its shares on Nasdaq under the ticker symbol BIRD.