The Honest Company, the five-year-old natural body and home care products company co-founded by the actress Jessica Alba, looks to be raising $75 million in new venture capital funding at $19.60 per share, according to a Delaware filing first spied by CBInsights and reported by Axios.
The amount is a far cry from the $45.75 per share price point of the company’s $100 million Series D round, closed in 2015 at what was reportedly a post-money valuation of $1.7 billion.
It also endangers The Honest Company’s coveted — or problematic, depending on your viewpoint — status as a so-called unicorn company.
While boasting a billion-dollar valuation puts companies in somewhat elite company with other richly valued private companies, high-flying valuations can also limit a company’s exit options.
The Honest Company may have already proved too rich for at least one acquirer. Roughly a year ago, the outfit was reported to be in talks with Unilever about a potential tie-up; soon after, Unilever opted instead to acquire Honest competitor Seventh Generation for $600 million.
Last year, the WSJ reported that Honest was generating $300 million in annual revenue after raising more than $220 million from investors, including General Catalyst Partners, Lightspeed Venture Partners, Institutional Venture Partners, Fidelity, Wellington Management and Hartford Financial.
The company hasn’t enjoyed smooth sailing since, seemingly. Honest co-founder Brian Lee stepped down as CEO, replaced by former Clorox executive Nick Vlahos, who has been tasked with positioning Honest as a more traditional packaged goods company. (Lee is a renowned tech entrepreneur whose past companies include Legal Zoom and ShoeDazzle.)
The company also cut 80 jobs in the first quarter of this year as it pushed into more offline channels. Indeed, while at the outset, Honest sold its products exclusively at its own website, its various products are also available to buy today at Target, Whole Foods, CVS, Nordstrom and elsewhere.
The company has also found itself fending off a number of lawsuits over the years from consumer advocacy groups concerned about its product labeling. We talked with Alba about those suits last year in an onstage discussion at our Disrupt show in New York.
We hope to have more on the new round soon. In the meantime, we reached out to an Honest Company representative for comment and were sent the following statement:
As a matter of policy, The Honest Company does not publicly comment on matters related to our financing activities or valuation, except to say that we are well-capitalized to execute on our long-term strategy.
Our team is focused on executing a plan that builds on our success to date and transforms Honest into a true omni-channel company that delivers the most authentic, engaging and seamless customer experience possible, wherever our customers shop.
In keeping with this strategy, we’re investing heavily in our sales, R&D, brand & retail marketing and fulfillment teams, and we have made several key changes at the management level, all as part of the strategic shift from e-commerce to omni-channel to drive company performance.
We have also begun to assess our international strategy as we look toward the future and our goal of creating a truly global brand.
We seek to provide baby, beauty, personal care and home care products which delight modern consumers and families everywhere with their safety, design and performance, and are focused on making our products accessible to as many people as possible.