Allbirds’ commitment to creating a sustainable future for the footwear industry is getting not only consumers, but also investors, to buy in, as the San Francisco startup reported $100 million in new funding Monday.
The raise now values the material science innovator, known for its sustainably manufactured footwear made out of renewable materials including New Zealand merino wool, eucalyptus trees, sugar, and its own crafted Trino, which combines the tree fiber and wool into one knit, at $1.7 billion, according to the The Wall Street Journal.
Led by global investment firm Franklin Templeton, the Series E round will help Allbirds strategically enter new product categories while maintaining its unwavering commitment to sustainable material innovation. The capital will also continue to support the shoe maker’s fast-growing international business and aid in the ongoing expansion of its fleet of brick-and-mortar stores, which totals 21 across the U.S, Europe, Asia, and New Zealand. Allbirds has raised more than $200 million since launching in March 2016.
The footwear brand aims to deliver shoes free of a carbon footprint, with its average shoe creating 7.6 kilograms of carbon dioxide equivalent compared to the standard sneaker’s 12.5 kilograms.
Allbirds recently reiterated that its top-three climate priorities were “Carbon, carbon [and] carbon” during a webinar sponsored by Lenzing last week.
The brand’s vice president of innovation and sustainability, Jad Finck, said it maintains a “very clear strategy to measure, reduce and offset” its carbon emissions. In April 2019, Allbirds began to add a “carbon tax” on every product it made, funneling that money into an Allbirds Carbon Fund that invests in verified planet-friendly initiatives like reforestation, building solar and wind capacity, and recapturing methane from landfill and livestock operations.
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“Business can be a force for positive change, and this additional capital will allow us to further our mission of bringing more sustainable products to people around the world,” Allbirds co-CEO Joey Zwillinger said in a statement. “We have seen the power of collective action in response to the global pandemic and, as we continue to grow, we will push for a similar united response to another universal threat: climate change.”
The funding round follows the launch of Tree Dashers, Allbirds’ first performance running shoe, in May. The Allbirds performance shoe, offered in men’s and women’s sizes, includes some of the brand’s signature ingredients such as the sugarcane SweetFoam midsole offering and a castor bean foam insole with a contoured foot bed further stabilizing the foot from one stride to the next. Additionally, it includes a naturally derived rubber, rather than its synthetic alternative, forms the outsole and helps to minimize signs of wear.
That month, Allbirds joined forces with athletic apparel and footwear giant Adidas to create a performance shoe with the lowest carbon emissions on the market. The collaborative shoe will be designed to meet Adidas’ rigorous performance standards, standing up to repeated impact and providing support through regular wear-and-tear.
Then in June, Allbirds took its sustainability-first approach into the underwear category, launching carbon-neutral skivvies using natural materials such merino wool and eucalyptus tree fiber, with a touch of Spandex for stretch, as well as buying offsets.
The footwear firm, which auctioned off upcycled goods with Chinatown Market, also recently released a new mobile app, which was downloaded 17,000 times within the first 24 hours of launch, Allbirds reps claimed.
The new funding comes on the heels of another $100 million investment that valued sneaker and streetwear marketplace Goat Group at $1.75 billion. Goat Group is best known as an online shopping place for sneakerheads, a market that has thrived even as other fashion sectors have slumped. But Allbirds is competing for a different audience, targeting the socially conscious, more casual clientele.
Allbirds indicated that its international arm continues to exceed expectations, highlighted “strong” launches in Japan and South Korea and the continued growth of the Chinese market.
The company’s Series E funding round also included contributions from T. Rowe Price, Baillie Gifford, TDM Growth Partners, Rockefeller Capital Management, and additional new and returning investors. Allbirds initially set out to raise $50 million with the Series E this summer, but the initiative met more investor interest than initially anticipated.
Allbirds is a certified benefit corporation, or B Corp, which means it commits to serve a range of stakeholders equally, including investors, consumers and employees. The company maintains that this status helps the company focus on combating climate change, and ensure that “doing well as a business does not have to come at the expense of doing good for the planet.”