Five years after its launch, footwear company Allbirds has listed on the Nasdaq at a valuation of more than $5bn. Founder Tim Brown tells Reweti Kohere how the moment feels.
“It’s been a surreal day, mate,” says Allbirds founder Tim Brown all the way from the city that never sleeps.
The former All Whites captain and Wellington Phoenix midfielder is taking my early Thursday morning phone call outside the headquarters of US investment bank Morgan Stanley in Times Square, New York City.
It’s late Wednesday afternoon his time, and the B Corp-certified footwear and apparel company, known for its pioneering woollen sneakers and slip-ons, is seeing out its maiden day of trading on the Nasdaq stock exchange.
For a business idea that people kept telling him wouldn’t work, turning it into a publicly-traded company worth NZ$5.7 billion feels almost unbelievable, Brown says. It makes sense – his own shares in Allbirds are now worth a cool $650m on the back of an initial public offer (IPO) that smashed its targets.
Overnight on Wednesday, some 20.2 million Allbirds shares, trading under the ticker BIRD, went up for grabs, with as many as 11,000 waitlisted New Zealanders eager to gain exclusive access through local trading platform Hatch. By day’s end, shares closed 93% higher on an initial price of $US15 apiece, having more than doubled in value at one point.
The public listing presents another opportunity for Allbirds to take its mission of “looking good, feeling good and doing good” to a new, larger audience of eco-conscious customers, Brown says. “We’ve had a theory that the world was shifting away from cheap plastics and synthetics toward natural and sustainable materials, so it’s an exciting moment. I sort of sit here more excited than ever about our product roadmap and things that we are planning to make in the coming years.”
The IPO also validates the thousands of other companies that aspire to be forces for good, “where purpose and profit don’t have to be in competition,” says Brown, who founded Allbirds in 2015 with current chief executive Joey Zwillinger, a renewables engineer whom he met in San Francisco, where the company is based.
The IPO gives Allbirds a new war chest that it plans to use to fund the opening of more brick-and-mortar stores around the world. In its early years the company sold directly to online customers rather than through traditional retail channels like department stores, and it now has 33 standalone stores worldwide. A similar direct-to-consumer model underpinned the trajectory of US eyewear company Warby Parker, which also listed on the Nasdaq at the end of September. Having been loss-making businesses so far, both debutants are banking on increasing their physical presence to fuel future growth and to turn a profit for investors, according to media reports on their pre-IPO filings.
Proceeds will also help Allbirds double down on what has been another of its hallmarks – the use of innovative materials like merino wool, tree fibres sourced from wood grown in South Africa, the “SweetFoam” shoe sole derived from Brazilian sugarcane, and even plant-based leather.
“We continue to believe that nature is the source of the biggest and best innovations. It’s just [that the world has] spent 50 years focused on cheap and widely available synthetic and plastic materials derived from oil. So we’re at a moment where we’re shifting and changing and it’s really exciting,” Brown says. “We’ve constructed our entire business to meet that moment, and that’s the key focus for our innovation.”
Allbirds has claimed the carbon impact of making each pair of its shoes is about 30% less than its rivals’, and in the lead-up to the IPO pledged to follow a “sustainability principles and objectives framework” – a set of commitments to environmental, social and governance criteria. These were developed alongside academics, rating agencies and charities, and Brown says they underscore that Allbirds’ desire to do good for the planet goes hand-in-hand with its desire to pay investors dividends.
The ride to the IPO has not always been smooth. The Financial Times reported Allbirds had walked back some of those commitments, having roughly halved the number of references to the framework in an updated IPO prospectus the company filed with the US Securities and Exchange Commission (SEC) last month.
Brown says he “wholeheartedly” disagrees with claims the company is cutting back on its environmental ambitions. “At the end of the day, we went out and tried to do something different. We didn’t water down anything, nothing has changed. The way we were able to exactly present [the IPO prospectus] based on feedback from the SEC was different than maybe exactly how we’d hoped, and that’s fine. That’s what happens when you push the envelope.”
As for the added scrutiny that accompanies public companies, Allbirds welcomes it, he says. The business has earned the right to list on the Nasdaq, although it must now deliver on its potential.
The momentous day had him reflecting on when he started out from his apartment on Cuba St in Wellington, with the idea of creating innovative, eco-friendly footwear. He launched Allbirds on Kickstarter, with a campaign shot on a family friend’s farm just north of the city.
“There [were] a lot of reasons why maybe it wouldn’t be successful but we had a vision, a belief that maybe natural materials could make incredible products and footwear and apparel and we stuck with it,” he says.
“Five years after launching Allbirds [and] many, many years after starting this from that apartment in Cuba St, it’s been a really special day and I’m humbled by the reaction.”
Read more:
Quietly radical shoe company Allbirds is getting ready for the big leagues