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The Honest Company has begun the process of eventually becoming a public company
(Updated with comment from The Honest Company)
The round was led by funds associated with Wellington Management Company, with other leading public market institutional investors, as well as existing investors Lightspeed Venture Partners, Institutional Venture Partners, General Catalyst Partners and ICONIQ Capital also participating.
The Honest Company had previously raised $52 million, including a $25 million round in November of last year. This latest round brings its total to $122 million in venture capital funding.
The fact that Wellington led the round is not a coincidence, as the company is now beginning to look at an eventual IPO, Brian Lee, a co-founder of The Honest Company, told VatorNews.
"I believe that the public market is what we’re heading for, the reason being that want to control own destiny," he said. "We are very mission focused, and to accomplish our vision, and what we set out to do, we have have to control our own destiny and the public markets will allow us to do that."
He pointed to being a public company as allowing The Honest Company to control its own product and formulation, and to "make sure our actual ingredients are not disrupted."
It also wants to be able to maintain the direct relationship it currently has with its customers.
"We are bless and thankful that there are so many mothers who see the world the same way we see it, who want to see change, make a difference, and create a healthy environment," Lee said.
The new funding will be used to help the company expand its current category offerings and availability, and to develop products across new categories, including baby forumla and, starting sometime next year, beauty products.
While getting into beauty products might seem like a departure for the company, which has traditionally sold products intended for babies and mothers, that is not how Lee sees it.
"We think of The Honest Company as helpful lifestyle brand. While we did focus initially on babies and mothers, as we grow as business we want to put more and more focus on the entire family," he said, "The cosmetics industry in general is full of toxic chemicals, so this continues our mission of creating a non-toxic climate for home and family. We think it will resonate with our consumer base."
In addition, the funding will go toward international expansion. Right now The Honest Company is only in the United States, with shipments also going to Canada. Using the new investment, it will launch in Asia, before going global, Lee told me.
Launched in 2012, the Santa Monica-based The Honest Company is a subscription service for eco-friendly baby and family products. It designs and manufactures all of its own products, such as diapers, wipes and bath / skin care. The Honest Company also formulates and manufactures household cleaning products, such as laundry detergent, surface cleaners and dish soap.
The company sells "bundles" of items at set costs, including the Diapers & Wipes Bundle; The Essentials Bundle, which allows users to pick five cleaning items to ship every month; and The Health & Wellness Bundle, in which users pay for two vitamin/supplement items.
Customers are not charged a monthly membership fee, and pay only for the Bundles that ship to them. Bundles will typically be shipped every four weeks, unless specified otherwise by the customer. Customers also pay shipping and handling prices.
Customers can also buy individual products on a one off basis without subscribing to a bundle from the site. That includes mouthwash, baby powder, sunscreen, laundry detergent, shampoo, diapers, or any of the other 70 products its produces.
In addition to selling directly to customer, The Honest Company makes money by selling products wholesale to various retail partners, such as Target, WholeFoods, Nordstroms, and Costco, among others.
(Note: The Honest Company founders Alba and Lee will be joining us at our 4th Annual Splash LA event on Oct. 2. Register here.)
(Image source: honest.com)
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The Honest Company (www.Honest.com), founded by Jessica Alba, Christopher Gavigan, Brian Lee and Sean Kane, was created to ensure that parents have access to non-toxic, eco-friendly, effective and beautiful family products that don't break the bank. Honest.com offers essentials for every family member including diapers, wipes, bath, skin care, home cleaning and health & wellness products conveniently door-delivered through a monthly subscription service of customized product bundles or single item purchase. As a certified B Corporation, The Honest Company strives to promote sustainability, engage employees and community, and support non-profit initiatives working to solve critical health and social issues affecting children and families. Available in the U.S. and Canada.