Allbirds, the once high-flying direct-to-consumer shoe brand built on Merino wool, is being sold for $39 million, a stark fall from its $4 billion valuation at its 2021 IPO. The company, which pioneered sustainable fashion, struggled to expand beyond its Silicon Valley base and turn a profit. Its global store count plummeted to just two outlets after closing all 60 U.S. locations, while sales dropped nearly 20% last year and it reported $77 million in net losses since going public.

Executives spent heavily on marketing, including TV ads, but the core wool shoe line proved a one-hit wonder, unable to sustain growth or profitability. The sale to American Exchange Group signals the end of Allbirds as an independent entity, with the company set to wind down operations. This collapse underscores the broader failure of the direct-to-consumer retail model that once promised disruption.

Silicon Valley has moved on to other trends, leaving Allbirds as a cautionary tale of hype over substance. The transaction, pending shareholder approval, marks a definitive end for a brand that once symbolized venture capital excess.