Great job by founders and team but I worry that most of these new CPG companies are not sustainable. Buffett invested billions into Heinz and Kraft, which struggled as a result of the commoditization of brands. I know fashion is different but most of these companies (e.g. AllBirds, Away) are not luxury brands. Are these valuations truly sustainable?
Their balance sheet looks very healthy for a growing company with a strong gross margin and very sustainable net losses relative to the capital they've been able to raise. As long as they can maintain their brand position in the space, the multiple they last raised at doesn't seem absurd to me at least.
Oh I agree, but I would put large bets against any company with a fresh take on a popular product that suddenly has an IPO. The growth curve to satisfy shareholders will destroy the brand's name and quality as what they do...doesn't really scale well. Eventually you are outsourcing shoe production to new sources, getting lower quality wool for cheaper, reducing costs in customer service. For a year or so things look great on paper, then slowly sales start to slip, the company cuts costs further, slowing the slip and then the cycle repeats until the brand is known for their Shoe Department collection for 29.99.
