No more middleman
In the last decade direct-to-consumer (D2C) companies have been cropping up everywhere. From razors to mattresses, shoes to glasses, D2C companies have popped up selling pretty much every consumer item you can think of. All of them promise to deliver better quality or price than brands that have to go through traditional retailers or channels, and all of them have really slick adverts on Facebook, Instagram and TikTok.
This week two of the biggest success stories in D2C filed for an IPO; Allbirds, the sustainable shoe of choice for many a tech-bro, and Warby Parker, the online retailer of prescription of glasses. Both companies have scaled to an impressive size in their short lives, reaching hundreds of millions of dollars in annual sales in the last few years. Both companies also lose money every year.
Warby Parker lost $56m from its operations in 2020, while Allbirds lost $29m. Despite those losses, each company is hoping to crystallize their efforts into billion-dollar valuations, while avoiding the fate of Casper, the D2C mattress brand that has seen its share price more than halve since its IPO thanks to mounting losses. Can they do better? Time will tell.
