Shares in Allbirds surged Wednesday after an IPO that indicated investors are receptive to its vision of sustainable footwear for eco-conscious consumers.
Allbirds raised about $303 million in Tuesday’s initial offering, which was priced at $15 per share, above the expected range of $12 to $14 per share, and gave the San Francisco-based startup an initial valuation of around $2.15 billion.
On the first day of trading Wednesday, the stock rose 93% to $28.89.
“People saw the genuine and authentic leadership that we’re putting forward on ESG,” Allbirds co-CEO Joey Zwillinger told CNBC, adding that investors were “really attracted by the opportunity to put their capital against a great opportunity to create outcomes that are better for the planet.”
As CNBC reports, “The listing follows the public debut of eyeglasses maker Warby Parker, the IPO of outdoor goods seller Solo Brands, and that of fashion rental platform Rent the Runway. It adds to the wave of trendy, venture-backed retailers testing investors’ appetite on Wall Street.”
Allbirds, which was founded in 2015 and operates 27 retail stores in the U.S., makes the Wool Runner sneaker from sustainably-sourced merino wool and, according to the IPO prospectus, continues to “innovate our materials with natural sources such as tree fiber, sugarcane, crab shells, and more.”
“We believe our products are not just better, but also better for the planet, with an average pair of Allbirds shoes carrying a carbon footprint that is approximately 30% less than our estimated carbon footprint for a standard pair of sneakers,” the prospectus says.
The company claims to have sold more than eight million pairs of shoes to over four million customers globally, with net revenue growing from $126 million in 2018 to $219.3 million in 2020.
However, Allbirds has yet to turn a profit, losing $25.9 million last year after a $14.5 million loss in 2019.
“Before the pandemic, we were already very close to and on the path to breakeven,” Zwillinger said. “So this is something well within our sights, and we see a very clear and short-term path [to profitability] or else we wouldn’t be going public.”