Allbirds IPO: Sustainability as the Future of Business

Allbirds' Public Debut and a New Era in Sustainable Fashion

Today marks a significant milestone for Allbirds, as the company commenced trading on the Nasdaq exchange under the fitting ticker symbol: BIRD.

Beginning with a focus on comfortable footwear crafted from natural wool, Allbirds has evolved beyond a traditional apparel brand.

A Shift Towards Materials Innovation

The company is now pioneering materials innovation, fundamentally altering the processes involved in clothing production.

Allbirds is actively promoting industry-wide change by open-sourcing its materials, allowing others to leverage these advancements.

This approach positions Allbirds as a leader in sustainability practices within the fashion sector.

The Environmental Impact of Fashion

The fashion industry’s environmental footprint is substantial, releasing approximately 2.1 billion tonnes of carbon dioxide into the atmosphere annually.

This figure surpasses the total emissions from all vehicles currently operating in the United States.

A significant portion of contemporary clothing relies on plastic, a derivative of oil and, ultimately, fossil fuels.

The Need for Transformation

A fundamental shift in this paradigm is essential, and it is currently underway.

Beyond Apparel: A Vision for the Future

Allbirds aims to do more than simply clothe its customers.

The company empowers individuals to contribute to a future where subsequent generations can experience a quality of life comparable to their own.

This is achieved through a combination of comfort, style, and performance, fostering a strong sense of brand loyalty.

A Shared Vision with Industry Leaders

Allbirds shares a common vision with other innovative companies like Tesla and Impossible Meats.

Tesla’s purpose extends beyond transportation, while Impossible Meats’ mission transcends simply satisfying hunger.

These businesses are united in their commitment to ensuring the planet’s long-term health and prosperity.

They also provide consumers with opportunities to actively participate in positive change without sacrificing their lifestyle.

Companies Built Around Sustainability Are Poised to Dominate the Future

Despite widespread agreement regarding the importance of sustainability, established companies will likely require substantial time to fully implement and refine sustainable practices. A common viewpoint fails to adequately recognize the difficulty of catching up in a competition that has already begun. This situation creates a significant opening for entrepreneurs to establish businesses fundamentally centered on purpose, generating lasting positive impact for communities, employees, and investors.

The focus on sustainability extends beyond consumer products, impacting all sectors of business. News frequently emerges regarding funding for sustainable technologies, from innovative startups to the environmental, social, and governance (ESG) initiatives of major corporations.

Investment in Sustainable Technologies is Surging

Data from The Economist reveals that investors channeled over $500 billion into “energy transition” initiatives in 2021 – encompassing decarbonization efforts across energy, transportation, industry, and agriculture. This represents a doubling of investment compared to 2010. The total investment needed to achieve global decarbonization is projected to exceed $30 trillion, offering a unique opportunity to support companies actively participating in the pursuit of net-zero carbon emissions. Climate change represents the most significant investment catalyst of this century.

Some perceive the current valuations of companies like Tesla – approximately 16x EV/NTM revenue – as high when contrasted with traditional automakers trading at 7x-10x earnings multiples. Similarly, Beyond Meat’s valuation of around 10x forward revenue is often considered substantial.

Investing in these businesses requires a conviction that the shift is not merely towards “sustainable” options. It demands a belief in a fundamental, long-term transformation where companies prioritizing sustainability in all aspects of their operations will emerge as the ultimate victors.

The Advantage of Being "Purpose Native"

New ventures launched today must be inherently “purpose native.” These companies are positioned to sustain their current growth and adoption rates for a longer duration than their competitors, due to this core advantage. Companies prioritizing sustainability from the outset have the strongest potential to become the leading businesses of the next generation.

Could Allbirds evolve into the next Nike, achieving consistent growth of around 25% over many years? While uncertain, their prospects are considerably better than those of other emerging competitors. It is hoped that global challenges will not prevent sustainability from playing a crucial role in reducing CO2 emissions.

Disclaimer: TDM Growth Partners holds an investment in Allbirds.