Photo: Allbirds

Allbirds, the company that made a splash as Silicon Valley's shoe equivalent of the ubiquitous hoodie, is releasing two new shoe styles, both made of a new summer-friendly material.

Why it matters: Silicon Valley favors comfort and utility over fashion, and companies like Allbirds cater to that. Allbirds is also part of a growing number of the direct-to-consumer companies that sell almost exclusively online.

From the start, Allbirds perfectly fit into Silicon Valley's cultural priorities when it comes to apparel: comfort, utility, and simplicity.

  • Like the region's signature hoodie, they (and sneakers in general) are acceptable footwear in most every circumstance—the office, the park, the restaurant.
  • Allbirds' original shoes come in two styles, both designed for comfort and light athleticism, made of a high-quality wool, and produced in several colors.
  • Its new shoes—the "Tree Runner" (a classic sneaker) and "Tree Skipper" (a take on the
    boat shoe)—are made of a 3-D knitted, eucalyptus fiber-based material the company developed. It's made to be more breathable for the summer than wool, the company tells Axios.

On the subject of style, while Allbirds sees its shoes as being well designed—and even stylish—co-founder Tim Brown tells Axios he's never thought of his company as being in the fashion business.

  • "We massively underestimated the power of comfort,” Brown told Axios, adding that Allbirds' customer base skews female, a bit of a surprise given the tech industry is dominated by men. In fact, New York City is its biggest market (followed by San Francisco), and it sold shoes in every U.S. zip code but two over the holidays.
  • This is all further underscored by the rise of other VC-backed online shoe startups like Rothy's and Birdies, which also sell only one or two styles that are designed for comfort and durability, available in a variety of colors, but are distinctly geared towards women with their classic ballet flats and slippers.
  • And even Allbirds is beginning to face competition in the ubiquitous sneaker category: Atoms, another local upstart, is gearing up to release its shoe, not to mention new styles by established brands like Adidas and Nike.

Allbirds is also part of a growing number of VC-backed consumer companies that are using the internet to sell directly to consumers, interact with customers, and build their brands.

  • Others include Casper (mattresses), Warby Parker (glasses), Glossier (cosmetics), Outdoor Voices (athletic apparel), and Bonobos (men's apparel), among many others.
  • Like other such startups, Allbirds has a brick-and-mortar presence (stores in S.F. and N.Y.C.), but it's focused on letting customers try and learn about the shoes rather than a traditional store.
  • According to Brown, this business model provides the company with bigger margins than if it sold through wholesalers, which means it has more room to invest in developing new materials or improving its designs.
  • Allbirds has raised $27.5 million in total funding.

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