INSUBCONTINENT EXCLUSIVE:
Joanna Glasner
Contributor
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Hydrate, intoxicate, caffeinate, repeat: Meet
the startups pouring the future
VCs serve up a large helping of cash to startups disrupting food
Good thing Carrie Bradshaw,
the shoe-loving heroine of Sex and the City, wasn&t a footwear venture capitalist
The high-heeled, high-priced and hard-to-walk-in pairs beloved by the TV icon are pretty much the least fundable concept in the shoe startup
space lately.
Instead, when they do dip their toe in the footwear space, venture investors have been putting a premium on comfort.
At least
that what recent funding records indicate
Over the past year-and-a-half, investors have tied up roughly $170 million in an assortment ofshoe-related startups, according to an
analysis of Crunchbase data
The vast majority is going to sellers and designers of footwear that people might actually want to walk in.
Top funding recipients are a
varied bunch, including everything from used sneaker marketplaces to high-end designers to toddler play shoes
Startups are also experimenting with little-used materials, turning used plastic bottles, merino wool and other substances into chic
wearables.
Below, we look at how startups are leveraging market trends to get a foot in the door.
Growth market
It should be noted that
recent footwear funding activity comes on the heels of some positive developments for the shoe industry.
First, this is a huge and growing
One recentreportpegged the global footwear market at $246 billion in 2017, with annual growth rates of around 4.5 percent.
Second, public
Shares of the world most valuable footwear company — Nike — have climbed more than 50 percent over the past nine months to reach a
market cap of nearly $130 billion
Stocks of several smaller rivals, including Adidas, have also performed well.
Third, men are spending more on footwear
Though they&ve long been stereotyped as the gender with more restrained shoe-buying habits, men are putting more money into footwear and
could be on track to close thespending gap.
Sneakeringin
Both men and women are spending more on sneakers, and venture capitalists have
Sneakers and sneaker-related businesses account for the majority of footwear startup funding, as consumers increasingly opt for more casual,
sportier styles.
Much of the innovation is in the sale and design of pricey, high-performance shoes
The largest footwear-focused round in recent months, for instance, went toGOAT, operator of an online sneaker marketplace that specializes
in rare and high-end shoes
The three-year-old, Los Angeles-based company secured a $60 million Series C in February.
Other sneaker companies to raise funding recently
includeStockX, an auction-style GOAT competitor;Stadium Goods, a streetwear retailer; andSuper Heroic, which makes high-performance athletic
shoes for children.
The spike in sneaker funding comes amid a growth streak for the sector
As mentioned previously, much of that is driven by men
However, one other bullish sneaker trend footwear analysts point to is thechanging buying habitsof women
Driven perhaps by a desire to walk more than a few blocks without being in pain, we&re buying fewer high heels and more sneakers.
Stylish
and eco-friendly
Demand for more comfortable footwear doesn&t only translate into more sneaker sales
Venture investors also see potential in other comfy shoe startups, particularly those with eco-friendly options.
In this camp isAllbirds, a
maker of merino wool shoes in casual styles that has raised more than $27 million to date
Meanwhile,Rothy&s, which makes shoes out of recycled plastic bottles and sells them for around $125 a pair, has brought in $7
million.
Slippers are also a fundable space, as evidenced by the $2 million seed round last fall forBirdies, a maker of footwear for people
who want to pad around the house in slippers while also looking stylish.
And as previously noted, it doesn&t look like high heel-focused
startups have been kicking up a lot of capital lately
However, designers that offer varied heel heights are still scoring some big rounds
This category includesTamara Mellon, a two-year-old brand that has raised more than $40 million to scale up a shoe design portfolio that
runs the gamut from flats to spike heels.
But does it make money
Recent history shows you can make a good exit with a shoe startup
And you can also flop or stagnate.
One of the more noticeable recent flops was Vancouver-based Shoes.com, an online shoe retailer
thatshutteredlast year and filed for bankruptcy following disappointing sales.
Others found they weren&t as good a fit for today consumers
Most recently,Shoes of Prey, a made-to-order women shoe startup that raised more than $25 million, secured a smallbridge roundto keep
A few years earlier, ShoeDazzle, a celebrity-backed shoe subscription service with more than $60 million in funding,soldat a steep
markdown.
Meanwhile, developers of 3D printing and scanning technology are stepping up the pace of MA
In April, Nike snapped upInvertex, a seed-funded startup that specialized in 3D foot-scanning
Last year, Aetrex Worldwide, a leading maker of therapeutic footwear, bought Sols, a venture-backed maker of 3D-printed custom orthotics and
insoles.
Granted, it hard to imagine an episode about Carrie Bradshaw shelling out for custom orthotics
But in the exit-driven world of startup financing, it seems clear that Manolo Blahniks are out, while sneakers and insoles are in.
