IPO Public Markets Retail and Direct To Consumer

Shares of Jessica Alba’s The Honest Co. Jump in Nasdaq Debut

Shares of The Honest Co. closed on first day of trading Wednesday on the Nasdaq at $23 per share, up 43.75 percent, or $7 from the expected open of $16 per share. More than 14 million shares changed hands Wednesday, according to the company’s Yahoo Finance profile.

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The company was expected to raise $412.8 million in its initial public offering of 25.8 million shares priced at $16 per share. The Santa Monica-based company is now valued at $1.89 billion, according to Bloomberg.

The personal-care products brand was co-founded by actress Jessica Alba in 2011 to create eco-friendly products for babies, and has since expanded into products for women and home, such as cosmetics and cleaning supplies.

Honest reported sales last year of $300.5 million, up from $235.5 million in 2019. It continued to operate at a net loss of $14.4 million in 2020, but closed the gap from a $31.1 million net loss in 2019, according to filings with the U.S. Securities and Exchange Commission.

To date, Honest has raised a total of $503 million in known venture-backed funding, according to Crunchbase data. Its most recent rounds were a $200 million private equity investment led by L Catterton in 2018, and a $75 million Series E round in 2017 led by Fidelity Management and Research Company. Other prominent backers include Glade Brook Capital Partners, Wellington Management, IVP, General Catalyst and Lightspeed Venture Partners, which led the company’s $6 million seed round back in 2011.

The company is offering around 6.45 million shares in the IPO with the rest being sold by investors, including L Catterton, IVP, Lightspeed and General Catalyst, according to filings.

Alba is the company’s chief creative officer and owns 5.65 million shares. Filings show she does not plan to offer any shares, so the closing price of $23 makes her stake worth approximately $129.9 million.

The offering is being led by Morgan Stanley, JPMorgan Chase & Co. and Jefferies Financial Group.

Honest shares are trading on the Nasdaq Global Select Market under the symbol HNST.

Feature photo of Nick Vlahos, CEO, and Jessica Alba, co-founder, of The Honest Company, courtesy of the company.
Blogroll illustration: Dom Guzman

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