Allbirds, the first DTC brand, may be preparing for an IPO with a valuation of $1.7 billion

Recently, according to multiple media reports, the well-known environmentally friendly DTC shoe brand Allbirds may have started its IPO listing plan and is recruiting a financial filing director to manage regulatory regulations and other financial documents. This move is usually a precursor to preparing for an IPO, but the company refused to provide any details about a possible IPO, valuation or performance.

The Allbirds brand was founded in San Francisco, USA in 2016 by former New Zealand professional football player Tim Brown and American entrepreneur Joey Zwillinger. It is characterized by natural and environmentally friendly merino wool material. It is the first generation of DTC brand to sell products through its official website . It is also the world's first fashion brand to label its entire product line with a "carbon footprint" label. In the first two years of the brand's establishment, it sold 1 million pairs of shoes through its own channels.

To date, Allbirds has opened 22 offline stores in the United States, Europe, China, Japan and New Zealand, and has also launched new shoe and clothing lines .

Since its inception, Allbirds has raised more than $200 million in funding, and the IPO is in line with the brand's founder's ambition to challenge footwear giants such as Nike and Adidas . Allbirds has always used sustainability as its key development advantage, using wool, eucalyptus pulp and other natural materials to make shoes, and even the shoelaces are made from recycled plastic bottles.

If successfully listed, the brand will become one of the few independently listed DTC brands, but Allbirds ' road to listing has not been smooth, and it can even be said to be full of difficulties.

As reflected in market sentiment, the unicorn's valuation suffered a major blow last September, with researcher Pitchbook saying its valuation had dropped to $1.7 billion from $1.73 billion in January, while data provider CB Insights said its valuation had plummeted to $1.14 billion.

How can DTC brands break the circle after being imitated all the time ?

Although as many as 43% of Americans currently know at least one DTC brand and 23% believe that DTC brands are authorities on fashion and trends, as traditional retailers and traditional brands accelerate their digitalization process, consumers will still turn to more familiar brands in an "uncertain environment."

In addition, the growth of DTC brands such as Allbirds is often driven by unsustainable marketing spending , and after success, a large number of imitators flock in. And as the market becomes more competitive and the cost of acquiring customers through social media channels is also increasing , the financing opportunities for such DTC brands are becoming fewer and fewer.

Susan Lyne, managing partner of BBG Ventures , commented that this is a very crowded market and an expensive market. DTC companies must have products that go beyond premium levels, their values ​​must be consistent with new consumer preferences, and in some cases, have very strong marketing and distribution advantages.

It is these potential problems that have hindered other DTC brands from going public. For example, men's clothing brands Bonobos and Greats were sold to more well-known retailers; Internet mattress and home furnishings startup Casper , whose stock price has been declining since its IPO on the New York Stock Exchange in February 2020; Internet eyewear company Warby Parker is widely regarded as the pioneer of the DTC business model. There have long been rumors of an IPO, but it has not yet been listed.

Last September, Allbirds completed a $100 million Series E financing round. In order to prove its growth potential to potential investors before its IPO, Allbirds plans to increase the number of its existing physical stores by 50% to 32 this year, launch lower-priced products, and cooperate with shoe giant Adidas to develop environmentally friendly sports shoes to give the brand the same sustainable development capabilities as its products .

If Allbirds succeeds in its IPO this year , it will become a successful example of the DTC brand development model. Let's wait and see what the final result will be!

Allbirds

DTC Brands