The Honest Company, the natural baby and beauty firm backed by popular actress Jessica Alba has pulled $413 million in its Initial Public Offering (IPO). As reported by Bloomberg, the firm raised that much capital from the sales of 25.8 million shares with 6.5 million shares being sold out by the company and existing investors selling 19.4 million.
Honest priced its shares at $14 to $17, but they were finally given out at $16 well within the range. Following the fundraising, the firm’s valuation now tops $1.45 billion per its outstanding shares, and $1.7 billion when fully diluted. The data is based on the filings lodged with the United States Securities and Exchange Commission (SEC).
The Honest Company is one of the top firms that benefited from the coronavirus pandemic, as the demand for some of its cleaning products spiked during the lockdowns. The need for sanitation products contributed to the over $301 million reported for sales in the 2020 fiscal year. Baby products including Diapers and wipes make the bulk of the sales figure, accounting for 63% of the total revenue.
Per the Bloomberg report, some of Honest’s early investors who sold out some of their stakes during the IPO include, private equity firm L Catterton, Institutional Venture Partners, Lightspeed Venture Partners, and General Catalyst.
Growth Caution Despite the Impressive Alba’s Honest IPO
Jessica Alba’s backed firm, Honest, and its IPO came off with impressive interest, both on the seller’s and buyers’ angle. But with the reduction in demand for some of its sanitation products caused by the gradual sweeping away of the pangs of the COVID-19 pandemic, the firm is maintaining a cautious forecast in its valuation moving forward.
Based on a similar switch in tone from its major competitors per the fading boom spiked by the pandemic, Honest has noted the possibility of a “sustained market turmoil” based on the unforeseeable impact of the pandemic. “If the disruptions caused by the Covid-19 pandemic continue for an extended period of time, our ability to meet the demands of our consumers may be materially impacted,” the company said.
In trailing the major other firms such as Coinbase Global Inc (NASDAQ: COIN), and others who made their public debuts this year, Honest may hit it off with broader investors in a geared-up IPO market, which looks to surpass the last year’s impressive performance.
The company is set to list on the Nasdaq Exchange under the ticker symbol “HNST”. The Underwriters listed for the IPO include Morgan Stanley (NYSE: MS), JPMorgan Chase & Co (NYSE: JPM), and Jefferies Financial Group Inc (NYSE: JEF).