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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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Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, cautioned on Sunday that the COVID-19 Omicron variant will "inevitably" be found in the United States.

Driving the news: Fauci, Biden's chief medical adviser, told ABC's George Stephanopoulos on "This Week" that U.S. officials will meet with colleagues from South Africa later on Sunday to try to determine the severity of the cases, as countries scramble to learn more about the variant.

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Why it matters: With their party controlling both the White House and Capitol, vulnerable Democrats worry supply-chain snafus will hurt them in next year's midterms.

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Scoop: Germany urges Congress not to sanction Putin’s pipeline

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The German government has urged members of Congress not to sanction the Nord Stream 2 pipeline, arguing that doing so will "weaken" U.S. credibility and "ultimately damage transatlantic unity," according to documents obtained by Axios.

Why it matters: At a time when roughly 100,000 Russian troops are massing at its border, Ukraine views Nord Stream 2 as an existential threat to its security. The pipeline would circumvent Ukrainian transit infrastructure and deliver Russian gas directly to Germany, eliminating one of the last deterrents Ukraine has against an invasion.