Atoms nabs $8.1M for shoes you can buy in quarter sizes for each foot

Published August 30, 2019

The direct-to-consumer trend in fashion has been one of the most interesting evolutions in e-commerce in the last several years, and today one of the trailblazers in the world of footwear is picking up some money from a list of illustrious backers to bring its concept to the masses.

Atoms, makers of sleek sneakers that are minimalist in style — “We will make only one shoe design a year, but we want to make that really well,” said co-founder Sidra Qasim — but not in substance — carefully crafted with comfort and durability in mind, sizes come in quarter increments and you can buy different measurements for each foot if your feet are among the millions that are not exactly the same size — has raised $8.1 million.

The company plans to use the funding to invest in further development of its shoes, and to expand its retail and marketing presence. To date, the company has been selling directly to consumers in the U.S. via its website — which at one point had a waiting list of nearly 40,000 people — and the idea will be to fold in other experiences, including selling in physical spaces in the future.

This Series A speaks to a number of interesting investors flocking to the company.

It is being led by Initialized Capital, the investment firm started by Reddit co-founder Alexis Ohanian and Garry Tan (both had first encountered Atoms and its co-founders, Qasim and CEO Waqas Ali — as mentors when the Pakistani husband and wife team were going through Y Combinator with their previous high-end shoe startup, Markhor); with other backers including Kleiner Perkins, Dollar Shave Club CEO Michael Dubin, Acumen founder and CEO Jacqueline Novogratz, LinkedIn CEO Jeff Weiner, TED curator Chris Anderson, the rapper Chamillionaire and previous backers Aatif Awan and Shrug Capital.

Investors have come to the company by way of being customers. “The thing that I love about Atoms is that it isn’t just a different look, it’s a different feel,” said Ohanian in a statement. “When I put on a pair for the first time, it was a totally unique experience. Atoms are more comfortable by an order of magnitude than any other shoe I’ve tried, and they quickly became the go-to shoe in my rotation whenever I was stepping out. That wouldn’t mean anything if the shoes didn’t look great. Luckily, that’s not a problem, I wear my Atoms all the time and even my fashion designer wife is a fan.”

Even before today’s achievement of closing a Series A, the startup has come a long way on a relative shoestring: with just around $560,000 in seed funding and some of the founders’ own savings, Atoms built a supply chain of companies that would make the materials and shoes that it wanted, and developed a gradual but strong marketing pipeline with influential people in tech, fashion and design. (That success no doubt played a big role in securing the Series A to double down and continue to build the company.)

Within the bigger trend of direct-to-consumer retail — where smaller brands are leveraging advances in e-commerce, social media and wider internet usage to build vertically integrated businesses that bypass traditional retailers and bigger e-commerce storefronts to source their customers and sales more directly — there has been a secondary trend disrupting the very products that are being sold by using technology and advances in manufacturing. Third Love is another example in this category: The company has built a huge business selling bras and other undergarments to women by completely rethinking how they are sized, and specifically by focusing on creating as wide a range of sizes as possible.

So while companies like Allbirds — which itself is very well capitalised — may look like direct competitors to Atoms, the company currently stands apart from the pack because of its own very distinctive approach to building a mass-market business, but one that aims to make its product as individualised as possible.

You might think that approaching shoe manufacturers with the idea of creating smaller-size increments and manufacturing shoes as single items rather than pairs would have been a formidable task, but as it turned out, Atoms seemed to come along at the right place and the right time.

“We thought it would be challenging, and it wasn’t unchallenging, but the good thing was that many manufacturers were already starting to think about this,” Ali said. “Think about it, there has been almost no innovation in shoe making in the last 30 or 40 years.” He said they were happy to talk to Atoms because “we were the first and only company looking at shoes this way.” That helped encourage him and Qasim, he added. “We knew we would be able to figure it all out.”

Nevertheless, the pair admit that the upfront costs have been very high (they would not say how high), but given the principle of economies of scale, the more shoes that Atoms sells, the better the economics.

Currently the shoes sell for $179 a pair, which is not cheap and puts them at the high end of the market, so it will be interesting to see how and if price points evolve as it matures as a business, and competitors big and small begin to catch onto the idea of selling their own footwear at a wider range of sizes.

My colleague Josh, who first wrote about Atoms when they launched, is our own in-house tester, and as someone who could have easily moved on to another pair of kicks after he hit publish, he remains a fan:

“My Atoms have held up incredibly well from daily wear for 14 months,” he said. “They’re still my comfiest shoes and make Nikes feel uncomfortable when I try them again. They’ve sustained a tiny bit of wear on the front of the foam sole (the toe just below the fabric) while the bottoms have worn down a little, like any shoes.

“The mesh fabric can pick up dirt or dust if you take them in the wilderness, and the sole isn’t hard enough that you won’t feel point rocks. But throwing them in the wash or a rub with a brush and they practically look new. The elastic laces are incredibly convenient.

“I’ve probably tied them 4 times since first lacing them up. And for a cleaner, more professional look you can tuck the bow of your laces behind the tongue. Their biggest problem is they’re porous and can let water through if you wear them in the rain or puddles.

“Overall, I’ve found them to be my best travel shoes because they’re so versatile. I can walk all day in them, but then go to a fancy dinner or nightclub. I can hike or even hit the gym with them if necessary, and they pack quite flat. With the quarter-sizing and different use cases, they make Allbirds look like restrictive outdoor slippers. For adults who still want to wear sneakers, the monochromatic color schemes and brandless, simple styles make Atoms feel as mature and reliable as you can get.”

Ali said that among those who buy one pair, some 85% have returned and purchased more, and that’s before it has even gone outside the U.S. Qasim said there has been a lot of interest in other regions, but for now it’s still following its original formula of keeping the organisation and business small and tight, with no plans to expand to further countries for the moment.

Meet Atoms, the minimalist startup shoes you’ll actually wear

Published June 14, 2018

Step aside, Allbirds. Atoms come in quarter-sizes you can mix-and-match. Emerging from stealth today in a TechCrunch exclusive, this shoe startup’s obsession with satisfaction allowed it to replace my Nikes. I’ve spent the last two months wearing Atoms every day. They’re the first sneaker classy-looking enough for semi-formal occasions, but that I can comfortably walk or even hike in for hours.

Here’s how Atoms is modernizing the footwear experience:

Pick your quarter-size, say 10.25, and Atoms sends you 10s, 10.25s, and 10.5s, plus socks
Try them on and pick any two, even different sizes for different feet, and send the rest back free
No logos. Atoms come in jet black, pure white or black top/white bottom, but don’t stick an ad on your feet
Copper threads inside eat bacteria, preventing funky smells
Elastic laces with subtle oval eyelets let Atoms slip on but stay tight so you rarely have to tie them
Get a discount on your next pair if you send in your old Atoms for analysis and donation

Image via Jeff Macke

At $179, Atoms are pricier than $100 lifestyle Nikes or $79 Allbirds. But the basketball shoe giant just sells in half sizes, while Allbirds offers only whole sizes that fit few perfectly. The right quarter-size Atoms for each foot makes them feel molded to your body.

“To make shoes better, you need to know why people wear shoes,” Atoms co-founder Waqas Ali tells me. People buy fancy dress shoes they never wear, yet feel embarrassed by the childish designs and branding on most sneakers. “We perfected Atoms for your everyday routine — walking, standing and commuting,” he explains. “You are a person not a billboard, so there’s no logo.”

That hasn’t stopped the shoes from going viral during their beta-testing phase. Everyone who tries them on seems to rave about them. That’s driven 4,000 people to sign up on the Atoms waitlist, which you can join to be first in line. Atoms launch this summer in the U.S., with the first wave of customers getting their shoes in late June/early July.

The big bang

Husband and wife duo Waqas and Sidra Ali started their first shoe company Markhor in Okara, Pakistan back in 2012. They attacked the market with one of the best qualities you can find in an entrepreneur: curiosity. Instead of coming in with preconceived notions, they traveled the world to research how people actually wear shoes. “You might assume that ‘Oh in Italy, everyone wears leather shoes,’ but the young people there were all wearing sneakers,” Waqas recalls.

After launching a Kickstarter, the Alis came to Silicon Valley to go through the prestigious Y Combinator startup accelerator in Summer 2015. There, they drilled into more customer research and product design.

Comfort and style were the big deciding factors in most sneaker purchases, so that’s where the couple wanted to differentiate. They discovered that more than 70 percent of people have at least a quarter-size difference in their two feet, and more than 7 percent have a half-size discrepancy. So why don’t other shoe companies offer quarter-sizes? “They make tons of different shoes,” Waqas says.

Suddenly, the two guiding principles of Atoms aligned. By designing just a single unisex model in a limited set of colors, it could make quarter-sizing scalable while stripping away all the goofy extra fabrics and patterns. Indeed, 35 percent of customers already take two different sizes. That breakthrough attracted $560,000 in seed funding from LinkedIn’s ex-head of growth Aatif Awan and Shrug Capital.

But Atoms is determined to avoid being labeled a Silicon Valley shoe. Rather than coders, the company wants creative types like painters and graphic designers to be its early adopters. The vision is to create a sneaker a head chef could wear all night in the kitchen without hurting, but that look elegant enough that they could stride into the chic dining room with confidence.

The future of footwear

“Most shoes in the market that claim they’re comfortable are only comfortable when you try them on,” Waqas laments. Take that other shoe startup Allbirds. They’re super-soft and made of wool, and the first steps feel like you’re wearing cloud slippers. But walk 10 blocks and you’ll find the bendy bottoms don’t protect you much.

That’s why Atoms hired 18-year-veteran of the shoe business Sangmin Lee, who’s worked with Adidas and Puma out of Portland and South Korea. He prototyped tons of different versions for Atoms. The result is a strong but light outsole on the bottom with indents cut out for anti-slip traction and to reduce weight. Meanwhile, the upper’s tough mesh material breathes but holds its shape, and refuses stains.

Image via Adam Bain

“Shoe companies say they use sustainable materials but you go to the factories and everything is falling apart,” Sidra tells me. Organic materials sound nice but can break down too quickly. “The way we make our shoes environmentally friendly is that they last long,” Waqas says with a laugh.

Two months of tough wear later, my Atoms are holding up great. The foamy mid-sole has frayed a tiny bit in the front like many shoes. And the knit materials ingrained some dust when I went camping in them that needed some brushing to get out. But they’ve succeeded in becoming my go-to shoe I can chill, work and play in.

Now Atoms is trying to build more commerce innovation to turn buyers into lifetime wearers. It’s working on a special pattern for the insole that will rub off based on where you put your weight. The idea is that when people send their old pairs in for a discount on the next, it can analyze that insole pattern to improve the shape of future models.

One day, Atoms hopes to create a completely personalized shoe shopping experience. It hopes to actually give you slightly different insoles with more or less arch support depending on how you wore the last ones. And it’s planning early access to new color combinations and laces for repeat buyers.

Atoms will need loyalty in case the shoe giants come out with their own minimalist, quarter-sized sneakers. Such a limited set of colors and single style mean plenty of people will simply find them ugly or outside their taste. And no, they’re not a great fit for the gym or with a suit. But if you want understated, durable shoes you don’t have to think about, Atoms excel.

The startup must rely on its nimbleness and a flawless customer experience if it’s going to gain a foothold in a business dominated by brands with huge ad campaigns and brick-and-mortar distribution. One thing it’s thankful to its shoe startup competitor for is that “Allbirds has shown the world is not just ruled by Nike and Adidas.”

Luckily Atoms has strong differentiation in a world of interchangeable sneakers. One customer “thought quarter-sizing was a joke or gimmick until I tried the 10.25s,” Airbnb designer Bryce Daniel tweeted. “How will I go back to a 10.5 when 10.25 fits so well?” Personally, there hasn’t been another tech or startup product in the past 10 years beyond Apple’s AirPods that has cemented itself so deeply into my daily life.

“There’s no way to hack shoes” Waqas concludes. “You just have to make a good shoes.”