Allbirds, whose signature merino wool sneakers were once a go-to in tech offices, has sold for $39 million. That’s a huge comedown for a company that was valued at $4 billion when it went public in 2021.
The brand embodied the 2010s direct-to-consumer startup boom, but it has struggled to turn a profit and catch on with consumers beyond its Bay Area fan base. Allbirds said last week that American Exchange Group, a brand management company, would buy all of its assets, The New York Times’ Kim Bhasin reported.
The company was founded in 2015. Fueled by venture capital investment, it had opened 15 stores by late 2019, mostly in the United States. By 2023, it had 60 worldwide. But all of its stores in the United States have since closed, with the exception of two outlet stores. Its attempt at spinoff products, including shoes made with eucalyptus tree fiber pulp, failed to attract customers. It has not turned a profit since going public, and it reported $77 million in net losses last year.
While other direct-to-consumer companies have also struggled lately, Allbirds stands out for losing almost all of its market value in just a few years.
The company’s success “was driven by Silicon Valley hype, more than deep popularity with consumers in the American hinterland,” Neil Saunders, managing director of GlobalData, a data analytics and consulting company, told Bhasin.
Its decline signifies both changing fashion tastes and shifting investment priorities in Silicon Valley: Tech workers now favor other styles of sneakers, and venture capitalists favor social commerce and artificial intelligence companies.
This article originally appeared in The New York Times.
