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Allbirds to potential investors in IPO filing: green may make you money

·Anchor, Editor-at-Large
·3 min read
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The freshly filed IPO prospectus from Allbirds will test the appetite of investors to own a green-focused retailer, that still has some proving to do on the top and bottom lines. 

Allbirds said Tuesday it will view its IPO as a "sustainable public equity offering." By that, Allbirds will be required to adhere to certain ESG (environmental, social and governance) standards. 

They include, according to the filing, "a minimum ESG rating, a stakeholder-centric mission and purpose, best practices on climate responses, value chain, people management, and corporate governance, transparent reporting of ESG practices and matters, and commitments to make meaningful progress on important ESG matters."

The approach for the offering shouldn't come as a total shock. 

Allbirds has positioned itself since its 2016 founding as not-your-typical shoe maker. Instead of churning out shoes based from oil derivatives ala Nike, the company has created shoes made from natural materials that are carbon neutral. The pitch attracted Silicon Valley elite to putting Allbirds on their feet. 

It also helped Allbirds to secure a nice chunk of change from investors in the private market.

The company's last capital raise was in September 2020 — Allbirds obtained $100 million, valuing the company at about $1.6 billion.

"We have always imagined that one day we might be [a public company], but no updates there," Allbirds co-founder and co-CEO Tim Brown told Yahoo Finance Live earlier this month. "We are keeping our head down at the moment."

Part of that head down mentality has led Allbirds to taking its sustainability message to apparel.

This month Allbirds revealed its first performance collection dubbed the "Natural Run" apparel line. Two years in the making, the line of tank tops, leggings and shorts is made from Eucalyptus Tree fiber and merino wool. The line's carbon footprint is also clearly labeled.

Allbirds points out most performance apparel lines are polyester-based, which is an oil-based derivative. The company says the line will help it reach its goal of having 75% of its products made from sustainable materials by 2025.

"I think the consumer is starting to demand that businesses and manufacturers in every sector make products that are more environmentally thoughtful and apparel is no different. Synthetic materials are not the future. This transformation to natural is just beginning," said Brown.

Despite a message that fits with the pro-Earth vibes of millennials, Allbirds has seen mixed financials in large part due to its laser focus on shoes and selling them mostly online (89% sales done online). 

For the six months ended June 30, Allbirds sales rose 27% to $117 million. The company's adjusted operating loss tallied $5.8 million compared to a loss of $6.3 million a year ago. Allbirds saw quarterly net losses in each quarter of 2020 as the pandemic raged on.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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