The route to public markets is being charted by Silicon Valley's favorite shoe company, one many of its tech worker admirers have trodden before.
Allbirds, the environmentally friendly shoe brand favored by the tech community and even actor-turned-tech-bro Ashton Kutcher, filed for an initial public offering on Tuesday. The business hopes to use the IPO to solve a classic Silicon Valley conundrum: being a hugely successful brand that hasn't made a profit.
Allbirds' selling pitch is sustainability: its no-nonsense, basic designs employ natural (and alluring-sounding) materials like eucalyptus fiber, castor bean oil, wool, and even crab shells. That's enough to make any owner feel good about the carbon impact of his or her footwear.
Allbirds expanded into sports leggings and exercise clothing made from merino wool and eucalyptus yarn last month, after initially focusing on casual shoes. These product lines pit the firm against Nike and Lululemon, two immensely profitable and powerful athletic-wear behemoths.
However, unlike its well-established competitors, Allbirds still has some work to do in terms of profitability:
Last year, Allbirds lost $26 million, a significant increase from the $14.5 million loss in 2019. And the company has already lost $21 million in the first six months of this year.
Revenue increased to $219 million in 2020 from $194 million the year before, but the company's profit prospects remained bleak due to high operational costs.
Allbirds has 27 locations in tech-friendly cities like New York, Shanghai, and Berlin, but internet sales account for 89 percent of the company's revenue. The $2 billion business said the proceeds from its IPO will be used to cover operational costs, capital expenditures, and prospective acquisitions.
Pearly White Profit: Another up-and-coming consumer platform may serve as a North Star for Allbirds. On Tuesday, Quip, a dental care start-up that provides improved teeth cleaning solutions for home usage, announced a $100 million funding round. Quip has been profitable since April 2020, with 7.5 million users and a service that can link people directly to 50,000 dental providers.
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