This week, a brand that was once valued at $4 billion just sold for $39 million.

@nataliebarbu

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Why it worked

The video uses a high-stakes business narrative about a well-known brand to provide educational value, keeping viewers engaged through clear, data-backed storytelling.

Summary

The creator analyzes the business failure of the shoe brand Allbirds, explaining how its decision to operate and raise capital like a software company led to its downfall. She concludes by discussing the brand's acquisition by American Exchange and its likely future in mass retail.

Structure

1Introduction of Allbirds' massive valuation drop
2Explanation of the 'growth at all costs' mentality
3Analysis of the company's financial losses and product expansion
4Discussion of the acquisition by American Exchange
5Speculation on the brand's future in mass retail

Call to action

you can follow me for some more tech and business lore that you can't ignore.

On-screen text

THIS COMPANY WENT FROM $4 BILLION TO IRRELEVANT IN 5 YEARS To Fit into Silicon Valley, Wear These Wool Shoes - The New York Times How Allbirds Became Silicon Valley's Favorite Sneaker Allbirds to Wind Down After Selling Assets for Just $39 Million Allbirds, Once Silicon Valley's Favorite Shoe, Sells for $39 Million Allbirds Completes $348 Million Initial Public Offering Allbirds shares surge 90% in eco-friendly shoe maker's market debut Allbirds raises nearly $303 million after pricing IPO at $15 apiece Maveron (Series A) -> Glossier, Warby Parker, Casper Lerer Hippeau (early) -> Glossier, Warby Parker, Casper Tiger Global (Series B) -> Stripe, Roblox, Facebook T. Rowe Price (late stage) -> Airbnb, SpaceX, Stripe Elephant (growth) -> Peloton, Farfetch, Scopely Slow Ventures (early) -> Pinterest, Robinhood, Slack Franklin Templeton / Fidelity / Baillie Gifford (late) -> Amazon, Tesla, Shopify Outdoor Voices AWAY Casper Glossier EVERLANE American Exchange is set to acquire Allbirds for $39 million. Here's what investors need to know. AEROSOLES ALEXIS BENDEL AMERICAN EXCHANGE b.o.c Børn Concept Børn CLIFFS BY WHITE MOUNTAIN LOUD SER

Original caption

This week, a brand that was once valued at $4 billion just sold for $39 million. Allbirds—the wool sneaker that took over Silicon Valley—just agreed to sell every asset for less than one-tenth of what it raised in its IPO alone. So how does a brand go from unicorn to almost nothing in five years? That's what happens when a shoe company gets funded like a software company. What do you think happens next? Does the brand equity survive, or is this the beginning of irrelevance? #allbirds #startups #venturecapital #founderstory #buildinginpublic

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Transcript

This week, a brand that was once valued at $4 billion just sold for $39 million. Allbirds, the wool sneaker that took over Silicon Valley, just agreed to sell every asset for less than one-tenth of what it raised in its IPO alone. So how does a brand go from being a unicorn to almost nothing in five years? Hi, I'm Natalie. I'm the founder of a startup and you can follow me for some more tech and business lore that you can't ignore. In November of 2021, Allbirds went public on the NASDAQ. Shares went up 90% on day one, and the company raised $348 million, that made the valuation just a little over $4 billion. This was a brand that was built on one single product, a wool merino sneaker. But why was this sneaker company treating themselves like a tech company and raising hundreds of millions of dollars? Before their IPO, they raised $250 million from VCs that typically back software companies. And let me remind you that in the 2010s, this was happening to so many direct-to-consumer companies. VCs thought that since there was no middleman, that the customer data alone would be worth billions. And when you raise that much money, it's pretty much a growth at all costs mentality. But for Allbirds specifically, the damage started happening after they IPO'd. First full year as a public company, they lost $101 million. Not because they didn't have revenue, they hit $297 million in revenue that year, but they were spending as if they were a company that was three times their size. They were opening stores aggressively and they were expanding their product line to things that their customer just didn't want. Wool leggings, puffer jackets, a performance shoe for runners. They fell into the trap that a lot of companies find themselves in, which is just chasing everyone. After five fiscal years, their losses totaled $419 million, even though their sales were $1.2 billion. Revenue peaked in 2022 and then just kept falling. And now we just found out that they are selling to American Exchange for $39 million. And you might be wondering, why would American Exchange want to buy them? They're a privately held licensing and brand management firm. Their strategy is to license these brands and then sell them to mass retailers. So don't be surprised if you start seeing Allbirds at a Target, DSW, Nordstrom Rack. That's what happens when a shoe company gets funded like a software company. What do you think is going to happen to Allbirds? Do you think that the brand equity is there at all or it's just going to completely shut down and go to irrelevance?