Allbirds Agrees to Sell Assets and IP to American Exchange Group for $39 Million

A brand that once commanded a $4 billion valuation agreed to sell for $39 million. Allbirds Inc. reached a deal to transfer its assets, intellectual property, and certain liabilities to American Exchange Group, closing the book on one of the direct-to-consumer era's most celebrated and ultimately cautionary stories. The deal, which still requires shareholder approval, is expected to close in the second quarter of 2026.

The numbers tell the story of the collapse clearly. Allbirds raised $348 million, including overallotment shares, when it went public in November 2021, with shares jumping 90% on opening day and the company's market value soaring past $4 billion. By Monday, the stock had closed at $2.98, giving the San Francisco-based company a market value of just $24.5 million. The $39 million purchase price, though it exceeds that figure, amounts to less than 1% of the company's 2021 peak.

Third-quarter 2025 sales came in just shy of $33 million, nearly half the $63 million Allbirds posted for the same period in 2021. A $101 million annual loss reported in March 2023 had already triggered a leadership shakeup and strategic reorganization; the decline never reversed. CEO Joe Vernachio had told investors the company spent 18 months in "a period of reinvention," closing 14 underperforming stores and working to become "a leaner, more focused organization." By the time of the announcement, Allbirds had closed most of its retail locations and pivoted toward a wholesale-focused model. Neither move stemmed the losses.

Allbirds was founded in 2015 by Tim Brown and Joey Zwillinger and built its identity around sustainable wool footwear. The Wool Runner debuted in 2016 and earned wide praise as the world's most comfortable shoe, selling 1 million pairs within two years. In August 2017, The New York Times described the sneakers as part of the Silicon Valley uniform; a month later, the company opened its first retail location, a 1,450-square-foot space in New York City's SoHo neighborhood. By 2020, the brand had spread well beyond tech campuses, with President Barack Obama repeatedly photographed in Wool Runners. GQ, less impressed, asked: "Can't someone send him a pair of Jordans?"

The brand's ambitions beyond the Wool Runner never found similar traction. The Dasher running shoe, launched in 2020, and the Tree Flyer line both failed to resonate with consumers. The company had operated 58 stores in 2022 before beginning a series of closures, while wholesale partnerships did not offset weakening direct-to-consumer sales. Competition from Nike and other sportswear incumbents compounded the pressure.

Allbirds shares rose 36% in after-hours trading in New York following the acquisition announcement, reflecting investor relief at a defined exit. The company is expected to file a proxy statement and seek shareholder approval for both the sale and the subsequent dissolution of the company no later than April 24. TD Cowen is acting as financial adviser and Holland & Hart LLP as legal counsel. A distribution of net proceeds to stockholders is expected in the third quarter. The company also delayed its fourth-quarter earnings report and canceled its scheduled earnings call as a direct result of the deal.