Allbirds reveals IPO valuation, waters down sustainability claims

Allbirds, the sneaker and activewear maker co-founded by ex-All White Tim Brown that uses NZ Merino wool in many of its products, has revealed its IPO target.

It has also revealed a wider loss for its latest quarter, issued a revised prospectus that walks back some of its “sustainability principles and objectives framework”, and outlined the size of the payday ahead for Brown.

The firm will seek a US$2 billion ($2.8b) valuation when it lists on the Nasdaq under the ticker symbol BIRD.

A date has yet to be set for the listing which, like the recent Rocket Lab listing, has seen Kiwis line up to participate through platforms including Hatch and Sharesies.

Allbirds will seek to raise up to US$269m with the listing as it issues 19.2m new shares.

The firm also revealed overnight that losses mounted in the latest quarter due to higher expenses. It said it expects to book a net loss of between US$15m and $18m for the three months to September 30, compared with a loss of US$7 million for the year-ago quarter.

Revenue for the September quarter will be between US$61m and US$62.5m, compared with US$47.2m a year earlier. More people are returning to its brick-and-mortar retail stores, and average order values are growing, the company said.

Allbirds was founded in 2014 by Brown and Joey Zwillinger – a renewables engineer who Brown met in San Francisco, where the company is now based.

An SEC filing says that Brown (now 40) and his co-CEO Zwillinger will each hold Class B shares with 10:1 voting rights over Class A shares post IPO.

Both will retain all of their Class B shares, according to an SEC filing, meaning ex Wellington Phoenix midfielder Brown will hold at least 15.3m shares worth US$214m ($300m) if Allbirds hits its target US$2b valuation and Zwillinger just under 13m shares.

Sustainability claims watered down

Allbirds has always had sustainability principles at the heart of its operation, and in August when it launched its prospectus, it billed its upcoming listing as the first “sustainable initial public offering”.

The company – which sources Merino wool in NZ for textile mills in Italy that feed manufacturing facilities in South Korea and the US – pledged to adhere to a “sustainability principles and objectives framework” (SPO), which was developed with a consultancy group advised by academics, rating agencies and charities.

But a Financial Times analysis of a revised prospectus, released earlier this month, found that mentions of the SPO framework had been more than halved, from 65 to 33, compared to the original document.

In the revised prospectus, Allbirds removed the claim that it is “conducting this offering while following the SPO framework”.

It also deleted a warning that doing so could increase the cost of the IPO.

Allbirds declined to comment on the changes.

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