Allbirds Sells Assets for $39M After $4B Valuation Plunge

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Allbirds, the San Francisco-based startup known for its popular wool sneakers, has agreed to sell its intellectual property and certain assets to American Exchange Group for $39 million. This comes after the company's valuation plunged from a high of $4 billion following its 2021 IPO to a mere fraction of that amount. The brand, co-founded by an engineer and a former professional soccer player, had initially won over customers with its sustainable approach, but struggled to maintain momentum as new product launches failed to replicate the success of its original wool sneakers.

Why it matters

Allbirds' downfall highlights the challenges faced by direct-to-consumer brands that prioritize sustainability over customer demand. The company's inability to diversify its product line and adapt to changing consumer preferences ultimately led to its steep decline, serving as a cautionary tale for startups focused on eco-friendly branding over meeting core customer needs.

The details

Allbirds, which had secured partnerships with celebrities like Leonardo DiCaprio and Travis Barker, was once viewed as a direct-to-consumer darling similar to Warby Parker. However, the company struggled as its new product launches, including wool leggings and sugar cane flip-flops, failed to resonate with customers. Customers began to abandon the brand in favor of competitors like Hoka and On, leading to a more than 95% drop in Allbirds' share price since its 2021 IPO.

• Allbirds launched in 2016.
• The company went public in 2021.
• On Monday, Allbirds announced it will sell its assets for $39 million.
• The deal is expected to close in the second quarter of 2026.

What they’re saying

What’s next

The deal to sell Allbirds' assets still needs approval from shareholders, but is expected to close in the second quarter of 2026. The proceeds from the sale will be distributed to Allbirds' stockholders.