Alba’s Honest Co., aided by pandemic demand, plans IPO
Honest Co., co-founded by actress Jessica Alba, has filed to list on the Nasdaq in an initial public offering.
The Los Angeles-based company said in a prospectus to the Securities and Exchange Commission on Friday that it will seek a listing size of $100 million, a placeholder amount that will probably change.
A share sale could value Honest at about $2 billion, Bloomberg News reported in January.
Morgan Stanley, JPMorgan Chase & Co. and Jefferies Financial Group Inc. are advising the company. It is expected to trade under the symbol HNST.
Launched in 2012, Honest sells diapers, moisturizer, shampoo and other products online and at thousands of retail locations.
Makers of consumer products have seen a steady rise in demand for goods that are seen as free of chemical and artificial additives in recent years — a trend that has been accentuated by the COVID-19 pandemic.
The filing comes amid heightened demand for personal-care and cleaning supplies during the pandemic. Sales last year were just over $300 million, according to the filing, a 28% increase from 2019 in part because of soaring interest in household supplies.
The company recorded a net loss of $14.5 million in 2020 and adjusted earnings before interest, taxes, depreciation and amortization of $11.2 million.
Since its launch in 2012, Honest has forged relationships with a number of the country’s largest retailers, including Target Corp. and Amazon.com Inc. Honest said it generated 55% of its sales last year from its own website, which has experienced gains during the pandemic as shoppers turn away from physical stores.
As consumers faced shortages of products such as wipes at the height of the pandemic and mandatory closures, they turned to online brands that could meet the demand.
Higher spending on hygiene and cleaning products is expected to persist, as well as a higher reliance on ecommerce.
Honest counts L Catterton’s global co-chief executives, Scott Dahnke and Michael Chu, among its largest shareholders. The filing also lists Lightspeed Venture Partners, Fidelity and General Catalyst as investors.