The Baby Product Company Jessica Alba Started Against Advice Just Raised USD70 Million
An eco-friendly baby diaper startup named 'The Honest Co.' co-founded by Hollywood actress Jessica Alba has raised USD70 million at a valuation just shy of USD1 billion and is beginning partnership talks to expand to China.
By Sadho Ram — 30 Aug 2014, 02:20 PM — Updated about 10 years ago
Actress and businesswoman Jessica Alba's The Honest Co., which sells products for babies that are made with non-toxic ingredients, just raised USD70 million, The WSJ reported via VentureWire
The Honest Co., an eco-friendly baby product company co-founded by Jessica Alba, is worth almost $1 billion after its latest funding round.
Image via wp.comIn preparation for an IPO, Jessica Alba’s The Honest Co., a maker of eco-friendly baby products, has raised $70 million at a valuation just shy of $1 billion and is beginning partnership talks to expand to China, Dow Jones VentureWire has learned.
The Series C round of funding comes from several VC investors including Wellington Management Company, Institutional Venture Partners, Iconiq Capital, Lightspeed Venture Partners, and General Catalyst Partners along with some anonymous public financial institutions.
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Prior to this round, The Honest Co. had secured USD52 million in funding. The company currently employs 275 people.
Not only that, but the company is expecting to make $150 million in revenue this year, three times the revenue it brought in last year. According to one of The Honest Co.’s early investors Jeremy Liew, about 80% of that revenue comes from customers who receive a monthly delivery of diapers and other products.
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The company, currently shipping to the US and Canada, is also looking to expand to China, England and Australia. All of these moves are aimed at prepping the startup for an upcoming IPO.
“We believe being a public company is the best path for us going forward and it’s good to get that validation early on,” Honest Chief Executive and Co-founder Brian Lee said, noting that public-markets investor Wellington Management Company led the Series C round.
“I can’t say when that will be, but we are definitely starting to think and act like a public company.”
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According to Sean Kane, COO of Honest Co., they're looking at potential deals in technology and manufacturing, in addition to other e-commerce businesses and distribution platforms
The Santa Monica, California-based company also is looking to use the cash to broaden its current product line -- which includes diapers and wipes -- into other areas such as cosmetics, Kane said.
bloomberg.comThe startup plans to expand internationally, with a website in China planned for late next year, he said. Honest Co. posted $50 million in revenue last year and Kane projects sales will triple in 2014.
bloomberg.comJessica Alba has effectively leveraged her star power for the benefit of the startup which has grown quickly by blending its environmentally sensitive products with a social mission
“She is an international star. We’re starting to see a lot of demand from her fans around the world,” Jeremy Liew, a partner with early investor Lightspeed Venture Partners said. “This idea for non-toxic, chemical free products has resonated around the world in developed and developing countries.”
Alba, who was named one of Fortune’s Most Powerful Women Entrepreneurs in 2012, co-founded the company in 2011 with the intention of blending good-for-you products with a feel-good social mission. The Honest Co. donates diapers and cribs as part of its business model, similar to the “buy one, donate one” model of startups like Warby Parker and Toms Shoes.
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Roughly 80% of Honest revenue is from customers who subscribe to a monthly service delivering diapers and other consumable products on a recurring basis. The company established programs like diaper and crib donations as part of its business model, earning it a B Corp certification from nonprofit group B Lab.
Earlier this year, Alba appeared on Late Night with Jimmy Fallon and briefly spoke about why she started this company. WATCH: