The direct-to-consumer footwear brand Allbirds, once a Silicon Valley staple valued at $4 billion, has agreed to be acquired by the American Exchange Group for $39 million. The New York-based fashion and consumer goods company announced the deal on Monday, March 30, marking a dramatic fall for the sustainable shoemaker.
The sale follows years of plummeting sales and strategic missteps. Since its high-profile IPO in November 2021, the company has reported declining net revenue every quarter from 2022 onwards. In its most recent earnings report, for the quarter ending September 30, 2025, Allbirds posted a loss of over $20 million and expressed "substantial doubt" about its ability to continue as a going concern.
From Kickstarter Darling to Public Company Struggles
Founded in 2016 by Tim Brown, a former New Zealand football vice-captain, and Joey Zwillinger, Allbirds initially captured the market with its mission to "make better things in a better way, through nature." Its signature Wool Runners, dubbed the "World's Most Comfortable Shoes" by Time magazine, became synonymous with the tech industry uniform.
A little more than 2,100 days after a successful $120,000 Kickstarter campaign, Allbirds went public. Its stock soared about 116% on its first day of trading in November 2021. However, the benefits of its direct-to-consumer model were soon questioned. "It's the de-DTC era," said Simeon Siegel, managing director for equity research at BMO Capital Markets, noting the model's limitations.
Failed Expansions and a Shrinking Footprint
Attempts to expand its product line and customer base largely backfired. The company launched performance-running shoes like the Dasher and Tree Flyer and even partnered with Adidas in 2022 to create a low-carbon sneaker. Despite some critical acclaim, these moves failed to stem losses, which grew from $14.5 million in 2019 to $25.9 million in 2020.
By 2025, the company's physical presence had drastically contracted. From over 50 stores worldwide at the end of 2022, Allbirds was down to 23 globally by September 2025. In January 2026, it announced the closure of nearly all remaining full-price US stores, leaving just two discount outlets in the US and two full-price stores in London.
Leadership Changes and a Final Strategic Shift
In a bid to return to profitability, the company underwent a sweeping reorganisation in 2022, slowing store openings and adding wholesale partners like Nordstrom and REI. Leadership also changed: co-founder Tim Brown stepped down as co-CEO in 2023 to become chief innovation officer, and in 2024, Joe Vernachio was promoted from COO to CEO, replacing Joey Zwillinger.
The strategic shift included focusing on core products like the Wool Runner and Tree Dasher while discontinuing underperforming apparel lines. However, these measures proved insufficient. The company's stock, which hit $28.64 on its first trading day, had fallen to $1.23 by 2023 and slid more than 50% from March 2025 to March 2026.
Sale Terms and Shareholder Impact
American Exchange Group will acquire Allbirds for a total consideration of $39 million. The company stated the transaction is expected to close in the second quarter of 2026, with the distribution of net proceeds to stockholders scheduled for the third quarter.
Following the announcement, Allbirds' stock rose approximately 24% in after-hours trading to $3.70 per share. This uptick offers a modest reprieve for shareholders after the stock's value had fallen about 50% over the preceding year.