Description
The Honest Company, Inc. is an American consumer goods company, founded by actress Jessica Alba. The company had $250 million in 2016 sales, and was valued shy of $1 billion as of October 2017. The Honest Company has raised multiple rounds of venture capital, and was anticipating an initial public offering as of 2016. Honest serves the United States and Canada, and planned to launch its beauty line products in Western Europe in 2019.
History
Company founder Jessica Alba was inspired by the 2008 birth of her first child, Honor, and her own history of childhood illnesses to create a company that provided an alternative to the prevalent baby products with ingredients such as petrochemicals and synthetic fragrances. She was compelled to become serious about this venture when one of her mother's baby laundry recommendations caused her to have a welt outbreak.
It took Alba three years to find her business partners Brian Lee, Sean Kane, and Christopher Gavigan. Despite advice that she should start small with a singular focus, Alba launched the company in 2012 with 17 products. Christopher Gavigan wrote the book, Healthy Child Healthy World, that addresses all the different toxins that children are exposed to in traditional household products.
While building her company, Alba has lobbied the United States Congress to make testing of consumer products in the marketplace for chemical inputs more stringent.
The Honest Company's 2013 sales were $50 million. Honest raised $70 million from venture capitalists in the summer of 2014 in preparation for an imminent initial public offering. As of August 2014, the company's products were available at retail stores in the United States and Canada. The financing put a value on the company of $1 billion. Prior to the 2014 round of financing led by Wellington Management Company, the company had raised $52 million in financing from ICONIQ Capital, General Catalyst Partners, Institutional Venture Partners and Lightspeed Venture Partners.
The company had plans to expand to England and Australia, but the summer 2014 funding was primarily to prepare for a launch in China. A company press release said the funding was to aid product development and expansion. In November 2014, the company had 275 employees and was projected to do $150 million in sales. 80% of its sales were online via a monthly subscription service with the remainder being done in department stores and discount warehouses. The company eventually totaled $170 million in sales in 2014.
In July 2015, Jessica Alba announced that The Honest Company would be moving its headquarters from 2700 Pennsylvania Avenue in Santa Monica to the Playa Vista neighborhood of Los Angeles in early 2016. The following month, it announced a new round of funding generated an additional $100 million of venture capital, implying a valuation of $1.7 billion. In late 2015, the company acquired Alt12 Apps, the makers of popular apps such as Baby Bump, Pink Pad, and Kidfolio. As of August 2015, the company had never employed traditional media such as print ads, television or billboards.
In March 2017, The Honest Company announced that Clorox veteran Nick Vlahos would replace Brian Lee as Chief Executive Officer. Vlahos worked to grow several Clorox brands, including Burt's Bees, Brita and Green Works. At that time, it was announced that Brian Lee would remain on the board in an advisory role. In early May some customers found dark spots on the company's baby wipes. The company found mold in testing, and recalled wipes that may have been affected.
In October 2017, The Honest Company closed a series E round of funding. After settling two lawsuits in the summer of 2017, the valuation was set at $19.60 per share down from the Series D shares sold in 2015 at $45.75. Thus, the company's value was below 1 billion.
In April 2021, The Honest Company officially filed for an initial public offering. The company began trading under ticker symbol HNST on May 5, 2021 with shares being traded on the Nasdaq stock exchange.
