Allbirds to sell assets to American Exchange Group for $39 million

Allbirds, the wool sneaker brand that became a well-known uniform for the Silicon Valley set, has agreed to sell all of its assets and intellectual property to American Exchange Group. The transaction is valued at $39 million. This sale price represents a premium to the company’s trading price prior to the announcement. On Monday, the stock closed at $2.98, giving Allbirds a total market value—or market cap—of $24.5 million. Following the announcement of the deal, Allbirds shares jumped 36% in after-hours trading.

The $39 million acquisition price marks a steep decline from the company’s previous financial heights. To put the transaction in perspective:

• The IPO Raise: Allbirds raised $348 million in its 2021 Initial Public Offering (IPO). The final sale price is nearly 10 times less than the capital raised during its public debut.
• Peak Valuation: On its first day of trading in 2021, the company’s valuation briefly commanded $4 billion.

The 11-year-old brand’s decline followed aggressive expansion efforts. After going public, Allbirds expanded into physical retail and new product categories, including leggings, jackets, and performance running shoes. These moves failed to connect with its core customer base, leading to mounting losses. Tim Brown, the co-founder of Allbirds, later admitted that this rapid growth cost the company “some of our DNA.”

The transaction now requires shareholder approval to proceed. The deal is expected to close in the second quarter, with the resulting proceeds distributed to stockholders sometime in the third quarter. The buyer, the 18-year-old American Exchange Group, is a privately held brand management firm whose existing portfolio includes brands such as Aerosoles and Jonathan Adler.

Why it matters

The sale highlights the stark reality for many consumer brands that went public during the 2021 boom, as they struggle to maintain their original identity while facing market pressure.