Honest Co., the mostly online, subscription-based, “non-toxic” baby products company co-founded by actress Jessica Alba in 2012, has raised $100 million in additional funding, pushing its valuation to an estimated $1.7 billion.
“Honest will use the new capital to accelerate its product roadmap, including the launch of its Honest Beauty line of skincare, color cosmetics, and hair care products, support its global expansion plans, and bolster its online and wholesale distribution,” it says in a release announcing the Series D financing that issued early this morning.
Reuters’ Lauren Hirsch and Olivia Oran first got wind of the financing round last week, writing that sources told them that in addition to expanding the makeup line, the money would be used for “pop-up shops, kiosks and new hires.” And it’s a “step in the company's path towards an initial public offering that is currently expected as soon as the second half of 2016,” they write.
Honest launched on the web with 17 products and has since expanded to more than 120, ranging from diapers to organic baby powder, totes, bottles, multivitamins, soap, healing balm and sunscreen (about which, more below). Its more than 4,000 retail partners in North America include Target, Whole Foods, Nordstrom and Costco.
“Being a mom is the most profound experience I’ve ever had,” says Alba in a home page video that sets the tone for the enterprise. “I’m Christopher Galvin,” says the co-founder and CEO, “and I’ve spent my adult career focusing on helping parents create healthy environments for their children.”
Brian Lee, who is also a co-founder of LegalZoom and ShoeDazzle, is also a partner.
They created the company, Alba says, “because we had to. We had to make it easier for parents to buy safe products for their families.” It’s working.
“Honest said earlier this year its sales grew to $170 million in 2014, up from $60 million in 2013,” write the Wall Street Journal’s Douglas MacMillan and Rolfe Winkler. “It sells more than 75% of its products through the Web….”
New investors include Glade Brook Capital Partners LLC, which led the round, and AllianceBernstein L.P., according to the release. Existing investors Fidelity Management & Research Co., Wellington Management Co. LLP and Institutional Venture Partners also participated.
The journey hasn’t all been a walk in the shade.
“Honest faced a major challenger last year in Amazon.com, which introduced a diaper brand that promised full transparency about the products’ origins. Amazon, however, this year pulled those diapers after customers complained of the design,” the WSJ’s MacMillan and Winkler write.
Then, earlier this month, “Alba’s new sunscreen product came under fire when users reported getting sunburns despite applying the product,” the New York Post’s Lisa Fickenscher reminds us. “An independent probe found that the sunscreen did not have enough zinc oxide.”
Alba and Galvin responded to a flurry of social media criticism with a post on the company’s “Honestly” blog that says, in part, that the product went through extensive testing and received the blessing of the Environmental Working Group (EWG).
“That said, what matters most to us is your trust and confidence. … We’ve personally picked up the phone to speak with many of you who have called our customer service hotline. Our team is reaching out to everyone who has posted on social media to assure you that we’re committed to your safety and satisfaction.”
The nearly 150 comments in response — ranging from on-point personal experiences with the sunscreen, both negative and positive, to discursions into other products and the company’s marketing efforts — is an informative read to anyone doing business online.
Meanwhile, Business Insiderhas a slideshow of Honest’s headquarters in Santa Monica, Calif. The photos of the sun-drenched, plant-filled, jellybean-rich interior include one of the wood jungle gym “on which the company invites mommy bloggers and their kids to play as they try out the latest Honest product.”
There are certainly more nefarious ways to curry favor from the social media.
Along those lines, one of its founding principles of Honest Co. is “Fun: We constantly seek ways to create it, have it, and share it as much as possible LOL!”
LOL! all the way to the bank, it appears.