Sep 28, 2018
Allbirds With $50 Million In Funding
Two years ago, Allbirds started with one type of shoe: a pair of superfine merino wool sneakers designed to be the most comfortable shoe on Earth. In a world where the line between formal and casual has become increasingly blurred, Allbirds' grey sneaker struck a note and sales took off—with over a million pairs sold in its first two years.
Investors bought in too, and on Thursday the company announced it had raised an additional $50 million in funding from T. Rowe Price, Fidelity and Tiger Global, bringing the total raised to $77.5 million. The new funding round values the company at over $1 billion, according to a source familiar with the deal.
"We've had an unbelievable start and response from our customers in a way that we could have never imagined," Allbirds cofounder and co-CEO Joey Zwillinger told Forbes earlier this month. The growth of the San Francisco-based shoe brand caught even its cofounders, Zwillinger and Tim Brown, by surprise. Zwillinger had recently looked at an old email he had sent Brown as they were forming the company which sketched out some revenue projections. His projection for revenue five years from launch ended up being only half of what it did in its first year. "So either we've done really well or we're really bad planners," he adds with a laugh.
Part of it was luck with timing: Clothes have shifted to become more casual, and athletic wear was no longer reserved for times when people were out running or going to the gym. Instead, sneakers became part of their everyday wardrobe and comfort became a premium. Allbirds focused on making the most comfortable shoes, but in a sustainable way.
The company's signature product is made out of wool, but it has expanded into new styles and materials in the last year, beginning with a line of runners made from eucalyptus fibers that's better for summer months when people might not want wool-covered feet. Allbirds also launched a limited run of $35 sugarcane foam flip-flops in time for summer. The company's "north star" is sustainability, Zwillinger says, and he attributes a lot of its success with customers to the fact that they can feel good when buying their product. "It's kinda the post-purchase halo," he said.
The latest funding round will likely add fuel to Allbird's expansion plans. The company started in New Zealand, Australia, Canada and the U.S. but will be expanding to the United Kingdom next week and has other international markets in mind. It's also making a small push into physical retail stores, opening its third store in London as part of its extension to the U.K.