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The Honest Company, the subscription service that offers eco-friendly baby and family products, has long been seen as a potential IPO candidate. Now comes a bit of news that be a sign that the day is coming soon.
This is the first funding that Honest has raised since its $70 million round almost a year ago exactly. That round too, was seen as an indication of a potential move to the public market, as it was led by funds associated with Wellington Management Company.
This latest round brings its total to $222 million in venture capital funding, and reportedly values it at $1.7 billion, increasing its valuation by 50% since its last funding round. Previous investors in the company include Lightspeed Venture Partners, Institutional Venture Partners, General Catalyst Partners and ICONIQ Capital.
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
The company's said sales grew to $170 million in 2014, up from $60 million in 2013.
The Honest Company did find itself in the midst of some controversy earlier this year over its suntan lotion, which consumers complained about, saying it was not actually protecting them. In response, Alba insisted in a blog post in which she assured customers that the product was safe, but that the company would also "do what it takes to make it right."
As for the potential for an IPO, Lee addressed the issue while speaking at Vator Splash LA last year.
"We never started this company with the intent of selling it. We started this company really with the idea that we could make a difference in this world and really create safer and healthier environments for everybody," he said.
"I think that, to achieve that, you have to reach a certain scale. You're not changing the world, you're not saying that many people, if you're doing $20 million in revenue. Even $100, $200, $500 million. You get there by being dramatically large and I think the only way we can achieve that by is taking the company public."
VatorNews has reached out to The Honest Company for confirmation of this report. We will update this story if we learn more.
(Brian Lee will be a keynote speaker at our upcoming Vator Splash LA event on October 15. Other speakers will include Adam Goldenberg Founder & CEO of JustFab; Michael Dubin, Founder & CEO of Dollar Shave Club; and TJ Sassani, Founder & CEO of zozi. Get your tickets here!)
(Image source: bossip.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.