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has just raised a $70 million Series C round. At it’s latest round the company’s valuation is just short of $1 billion. The eco-friendly, baby-safe online retailer will use the funds to expand product offerings and spur growth in America and abroad, including possible partnerships in China.
CEO and co-founder Brian Lee told the Wall Street Journal that this latest round and valuation is another step closer to an IPO. “We believe being a public company is the best path for us going forward and it’s good to get that validation early on,” said Lee. “I can’t say when that will be, but we are definitely starting to think and act like a public company.”
In addition to its wholesome products, the company is well known for its co-founder, actress Jessica Alba. Since its founding Alba’s status as a celebrity mother has been a highly effective part of The Honest Company’s marketing strategy. Alba’s persona as a do-it-all thoughtful mother has helped brand the company’s products as a smart choice for conscientious upper income families.
Though the Honest Company’s product line initially was purely focused on baby products it has expanded to everything from organic shaving oil to plant-based multi-surface cleaner. Products are labeled with various certificates like ‘cruelty free’ to indicate the item was not tested on animals or ‘Designed for the Environment,’ a designation by the EPA recognizing ‘household efficiency, safety and cost-effectiveness.’ The Honest Company is also a Certified B Corporation and donates part of its revenue to social causes.
Around 80 percent of the company’s revenue comes from online subscriptions that deliver monthly packages of goods like diapers and wipes or cleaning supplies. Though 80 percent of the company’s sales take place online the company has also expanded to several physical locations including Target and Whole Foods.
This $70 million round of capital comes from Wellington Management Company, Institutional Venture Partners, Iconiq Capital, Lightspeed Venture Partners, General Catalyst Partners, and several unnamed investors.
Launched in 2012, The Honest Company has now raised $122 million in total and employs about 275 people. In 2014 the company has a projected annual revenue run rate of more than $150 million- three times more revenue than 2013 according to CEO Lee.
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