Sustainable sneaker maker, Allbirds, is selling most of its business to American Exchange Group for just $39 million, marking a dramatic fall from its $4 billion valuation.
The brand gained fame for its wool shoes and high-profile fans, including former president Barack Obama.
The deal and what it means
Allbirds has agreed to sell its intellectual property and key assets to American Exchange Group, pending shareholder approval.
The deal is expected to close in the second quarter and reflects a steep decline from the $301 million it raised during its 2021 IPO.
Founded in 2015, the company quickly gained popularity in Silicon Valley and expanded to 60 stores worldwide by 2023.
However, growth did not translate into success. Customers favored comfort, price, and design over sustainability.
At the same time, product missteps and rapid expansion weakened the brand. Some launches hurt its image, while new categories like activewear and golf shoes failed to gain traction.
Sales dropped nearly 20% last year, and net losses reached $77 million. The company also shut most US stores and never turned a profit after going public.
Rising competition further eroded its position, sending shares down more than 95% since 2021, including a recent 16% decline.
The deal is expected to close in Q2 if shareholders approve it, with payouts expected in Q3.