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Allbirds S-1 IPO
- nkotov 5y agoSuper excited to see this. I'm on my fifth pair of Allbirds - by far the most comfortable shoes I've had in a while and I like the way they look. My only gripe with them is how easy they get dirty if you get the lighter-colored ones. I think long-term, stores might be their best bet. There is still a good amount of people who are skeptical on purchasing shoes online even with easy return options. Good job to these founders!
- lupire 5y agoFifth pair in how many years?
- avelis 5y agoI have bought their shoes for awhile now. I like their shoes and the expansion into other shoe types.
- neom 5y ago"•Grew net revenue from $126.0 million in 2018 to $219.3 million in 2020, representing a compound annual growth rate, or CAGR, of 31.9%; •Grew our digital revenue from $113.2 million in 2018 to $194.6 million in 2020, representing a CAGR of 31.1%; •Grew our store footprint from three in 2018 to 22 in 2020; •Grew our U.S. and international revenue by $52.5 million and $40.7 million, respectively, from 2018 to 2020, representing a CAGR of 20.8% and 112.4%, respectively; •Increased gross margin by 454 basis points from 46.9% in 2018 to 51.4% in 2020; •Generated net losses of $14.5 million and $25.9 million in 2019 and 2020, respectively; and •Generated adjusted EBITDA of $(1.3) million and $(15.4) million in 2019 and 2020, respectively."
- black6 5y agoHow, as a consumer goods manufacturer, do you continue to lose money? My background is in a different manufacturing sector, beer, but even as a journeyman brewer I was doing COGS analyses and knew exactly how much each bottle/keg cost us for each brew so that we could be profitable.
- deleted 5y ago[deleted]
- BoorishBears 5y agoBecause it's not their money. It's a VC money, and the VCs will let this go on as long as an exit is in sight because they can then extract their money + a hefty premium. Then at that point the money faucet is re-plumbed to the public's money via institutional investors and from there they're free to do the slow decline to penny stock at their own pace
- vlad11 5y agoVC backed company try to grow revenue at all cost, they don't care about profit.
- neom 5y agoBuilding a business to such scale that it can be a public company is an extremely expensive endeavour, continuing that growth till a time such that the business can sustain "market weather" while in the public is even more so. As crazy as it may seem, the bar for a public market business to be considered a "stable" or "safe" investment is very very very high and takes years in the public to build the platform that holds your market share. In near all instances, you have to continue to spend a lot into that sustainability.
- beambot 5y agoHaven't read the S-1, but their gross margins appear pretty solid, so they're probably spending aggressively in SG&A and capex-heavy depreciated assets that will hit COGS over time. Eg growing from 3 stores to 22 in two years probably requires a lot of big upfront expenditures. It's important to look at cashflow statements, P&L, and balance sheet in concert rather than isolation -- especially for larger fast-growing companies.
- rcar 5y agoFrom their S-1, 2020 revenue was $219m. From that, $106m was cost of revenue, $87m went out to SG&A, and $55m for marketing. Presumably if they wanted to hit pure profitability, they could take their foot off the gas on the admin expenses and marketing, but since they're still seeing good growth and seem to be having an easy enough time getting capital, they may as well keep spending on additional growth.
- nappy-doo 5y agoEBITDA in a non-comparison context is meaningless. EBITDA is only useful when you're comparing ownership of two like businesses. What is interest, if not an expense? What is tax, if not an expense? What is depreciation if not an expense? Alright, amortization, yeah, that one could get added back in – I buy that. Whenever someone starts talking about EBITDA, check your wallet.
- swamp40 5y agoWhy can't the comparison context be from one year to the next year?
- ericmay 5y agoBecause your choice isn't "invest or not" but invest relative to other potential investments in the marketplace.
- mbesto 5y agoThe parent comment is right. EBITDA is used for both industry comparison as well as YoY trends. For YoY it's used to try to eliminate "noise".
- ericmay 5y agoYoY trends don't matter in isolation as you're trying to decide to make an investment.
- mbesto 5y ago> YoY trends don't matter in isolation as you're trying to decide to make an investment. What. You 100% can make investing decisions in isolation. I don't think this is what you meant you say, because this makes absolutely no sense at all. If someone comes to me and says "if you give me a dollar today, I'll give you $10 tomorrow" I really don't need to consider anything else. Sure, someone else might say "I'll give you $11 instead", but if the deal is there and I can analyze that the risk of default is minimal, then I can absolutely make that decision in isolation.
- lupire 5y agoWhat is digital revenue? Online sales of physical products, or something else?
- RC_ITR 5y agoNot mentioned: $140mn in Sales and Marketing to generate $110mn in Gross Profit.
- hammock 5y agoIs that unusual?
- ac29 5y agoMaybe not unusual for a young, growing company, but its obviously not sustainable for each dollar in profit to cost more than a dollar in sales/marketing effort. Thats a negative ROI.
- wonnage 5y agoYou're confusing profit and revenue
- gamblor956 5y agoGross profit = the profit from a specific business activity, in this case, sales, when looking solely at sales revenue less the specific costs of generating that revenue (aka COGS). Net profit = the profit from the overall business, taking into account all sources of income and all expenses. Sales and marketing are usually not treated as part of COGS, because they are not a necessary expense (in this context, COGS would include things like materials and production costs).
- RC_ITR 5y agoMany investors think in gross profit terms rather than revenue terms, because gross profit is the actual “cash in” from a given sale. That had become less common because software has famously high gross margins that aren’t necessarily linearly tied to revenue, but allbirds are shoes.
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- robbiemitchell 5y agoWhy are the top line numbers shown from 2018 to 2020? If I had to guess, it would be because 2018-2019 showed the most growth while 2019-2020 showed less, and they want to show good % changes.
- ABeeSea 5y agoYou would be correct. On page 18, 2019 revenue was 193M and 2020 was 219M, growth of only 13%.
- farmerstan 5y agoNo. All S1s do it this way for some reason. My wife just worked on an S1 and had a similar comment but she investigated other S1s and saw that was just how it was done.
- neom 5y agoIt's because the gold standard for IPO 8 quartners with sustained growth.
- robbiemitchell 5y agoBut showing two data points doesn't actually demonstrate sustained growth. Showing quarterly or at least annually would get closer. Showing two data points could mask growth in year one and losses in year two.
- tinyhouse 5y agoGood observation. That's not th standard as people here claim. Companies often play such games. Esp to make their IPO look attractive. I went over Squarespace S-1 today who IPOed in May and saw they claim around 70% revenue growth in commerce from 2019 to 2020. Then somewhere in the document you find that they acquired a company in March 2021 but they include their revenue in their 2020 numbers. So the 70% growth is not really organic growth and they don't mention anything about the growth of the acquired company (Tock).
- ddek 5y agoSo, we're doing fashion startups now? Seriously though, I have no idea how valid Allbirds sustainability credentials are. They are, however, like slippers I can wear outside. Mine are two years old and have almost no signs of age. Price point is about normal for my shoes. I'm a fan.
- deberon 5y agoSoftware is ubiquitous, us technologists work in way more industries than "tech".
- drjasonharrison 5y agoAnd the assumption that "tech" ends at the browser, cloud, or digital device is rooted in ignorance about how consumer goods are created from the "raw inputs"
- lotsofpulp 5y agoThe big difference is whether or not the product has near zero marginal costs, network effects, and/or large moats due to copyrights and patents. From a valuation perspective these factors greatly affect how much money can be made.
- md_ 5y agoOK, so serious question: what's the cool tech in Allbirds? I'm willing to buy that the wool sneakers are technologically innovative, but my gut instinct is that the S-1 is on HN because, somehow, we've all become convinced that direct-to-consumer businesses are "tech adjacent." Like, what about that DTC toothbrush company? Or those guys who sell disposable razors? Or the online viagra salesmen whose ads are all over the MTA? Somehow, investors have become convinced these are tech companies ("democratizing access to consumer goods?") that should be valued at whacky p/e ratios, instead of yet another online commodity retailer.
- marc__1 5y ago
- maxehmookau 5y agoSeems reasonable. Nice product, well priced, strong sustainablilty credentials. Good for them.
- pvm3 5y agoGreat job by founders and team but I worry that most of these new CPG companies are not sustainable. Buffett invested billions into Heinz and Kraft, which struggled as a result of the commoditization of brands. I know fashion is different but most of these companies (e.g. AllBirds, Away) are not luxury brands. Are these valuations truly sustainable?
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- rcar 5y agoTheir balance sheet looks very healthy for a growing company with a strong gross margin and very sustainable net losses relative to the capital they've been able to raise. As long as they can maintain their brand position in the space, the multiple they last raised at doesn't seem absurd to me at least.
- agloeregrets 5y agoOh I agree, but I would put large bets against any company with a fresh take on a popular product that suddenly has an IPO. The growth curve to satisfy shareholders will destroy the brand's name and quality as what they do...doesn't really scale well. Eventually you are outsourcing shoe production to new sources, getting lower quality wool for cheaper, reducing costs in customer service. For a year or so things look great on paper, then slowly sales start to slip, the company cuts costs further, slowing the slip and then the cycle repeats until the brand is known for their Shoe Department collection for 29.99.
- Raed667 5y agoA great (2019) video about the sustainability claim of Allbirds https://www.youtube.com/watch?v=et33AaoZZCQ https://www.youtube.com/watch?v=et33AaoZZCQ
- ordinaryradical 5y agoI’m honestly more compelled to invest because of this vision than the financials. We need products like this to succeed in the world.
- rad_gruchalski 5y agoOr how Germans pronounce it: “Albert’s”. Congrats on the ipo.
- owenwil 5y agoWow, glad to see this. Allbirds is a great business, makes good products, and cares about having an impact on the world/reducing climate impacts - not sure if I’ve ever seen any other S1 filing that mentions climate impacts/goals as extensively. If the amount of shoes/repurchases I and many others I know have made over the years from them is any indication, they’re going to keep growing fast - they seem to have a knack for bringing customers back; the filing says more than 43% of customers return to purchase something else, which is impressive.
- tyre 5y ago> Allbirds is a great business They haven’t proven that. Yes, they’ve sold a lot of shoes, but they’ve never made a profit and don’t project doing so. Every money-losing company that raises money has a story of how it will become profitable. It is possible that they do, but they haven’t yet.
- mywittyname 5y agoThe company could be profitable tomorrow if they wanted to. It's not like this is some grand, new, unproven business concept, or one that is only competitive due to VC capital. They sell shoes, and they sell them at a decent profit. There are lots of large apparel companies out there making stacks of money, many of whom started off selling shoes. This is not Uber/AirBnb, it's Adidas/Puma/Nike.
- vavooom 5y agoHiked for 6 weeks straight across Europe mostly in a pair of tree runner Allbirds. Incredible shoe and company.
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- mtalantikite 5y agoNever heard of them until just now. Looking at the men's "Everyday" collection they sort of remind me of the original Yeezys if you were to take the edge off of them and make them blend into an office park. Not really my thing, but I'm here for companies not using slave labor and trying to use materials that aren't so destructive to the planet.
- creaghpatr 5y agoWouldn't call them the best value, but I love my pair they are extremely comfortable and versatile for matching with stuff. Fashion-wise, they are pretty bland.
- acdha 5y agoThey’re very comfortable & breathable – I used to refer to them as my office slippers back when offices were a place where we spent time. Nice enough looking for meetings, but you didn’t mind wearing them all day even in the summer.
- warent 5y agoI had a pair for like 3 years. They're extremely durable and light, easy to clean (toss in the wash, air dry), it's almost like wearing super tough socks. The best part about them was the convenience and comfort, but as far as style they're maybe one rung up the ladder from Crocs, so you're not really winning points there. They go well with shorts and look particularly awkward in jeans.
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- bitsoda 5y agoI hope they stay in business for a long time. Not to sound like a shill or anything, but their shoes are some of the most comfy I've tried. I pretty much wear them to the office every day. Are there more comfortable shoes out there? I don't know, probably, but I'm a happy Allbirds customer all the same.
- gjs278 5y agoatoms are better
- Server6 5y agoI like their shoes because they're not crazy styled. Normal standard shoes - no bullshit. They're comfortable and if a pair wears out I can buy the exact same shoe. Have you ever tried to replace a pair Nikes with the the same shoe? Its impossible.
- lotsofpulp 5y agoThat’s why I like ASICS. I can just keep buying the same model shoe.
- bpicolo 5y agoI like them for the most part, but their soles early on were dangerously slippery on any marginally wet surfaces, big turn off. I've heard this is better but not great now?
- jmsuth 5y agoThis was my experience too. It was like ice skating.
- jareklupinski 5y agoafter wearing a few different pairs of allbirds for years without issue, i just sprained my foot a week ago after slipping on a slick sidewalk after a drizzle in a reasonably new pair non-skid soles on a fashionable lightweight sneaker are impossible to find :(
- judge2020 5y agoBetter URL directly to the S-1, like other S-1 posts: https://www.sec.gov/Archives/edgar/data/1653909/000162828021017824/allbirdss-1.htm https://www.sec.gov/Archives/edgar/data/1653909/000162828021...
- kerbs 5y agoThe wool line made them popular, but the tree runner in my opinion is my absolute favorite shoe. My white pair has survived about 10 runs through the wash, and damn if there isn't a better looking shoe to wear sockless.
- cube2222 5y agoAfter realizing most shoes are animal-based or synthetic, even if they're not leather, I've set out to find a pair which is non-synthetic non-animal-based and I've found these (and giesswein's which I didn't like). Bought them, really comfortable, great refund policy (could test out 2-3 pairs to find my right size), would definitely recommend.
- stronglikedan 5y agoShame they don't seem to make wide sizes.
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- 42droids 5y agoDoes anyone know when these shares will be available for us mere mortals? Thanks
- alangibson 5y agoI don't see how Allbirds can have any sort of moat keeping out competitors even in the medium term. Shoes are notoriously easy to duplicate. See for instance the many, many near-perfect Croc copies.
- alberth 5y agoWhenever I hear about Allbirds, I can't but laugh and think about this site: https://vcstarterkit.com https://vcstarterkit.com
- fkfowl3 5y agoApart from all the numbers. The other thing that actually matters is the quality itself. I'm definitely not locked in on the brand as the products are not great after you them for a while. i.e they don't age graciously and i see it as a major problem in the long run (no repeat customers).
- diebeforei485 5y agoI have a pair of their shoes and like them. I had no idea they made clothes[1] however. Good luck to the team. [1] https://www.allbirds.com/products/womens-wool-jumper-orchid https://www.allbirds.com/products/womens-wool-jumper-orchid