Honest company’s investors (partly) cash out
May 6, 2021
And it’s back.
The Honest Company, a maker of eco-friendly home products founded by actress Jessica Alba, soared 44% as of the market’s close Wednesday, valuing the business at about $2.1 billion.
It marks a rare comeback in valuation for the company, which hit a peak of nearly $1.7 billion while private before losing some of its gains over concerns of mislabelling.
Honest Company raised about $103.2 million as part of the IPO while selling shareholders raised about $309.7 million by offering shares at $16 apiece. As of the close of the market Wednesday, shares were trading at $23 apiece.
So how much did investors make from the IPO? Assuming the underwriters exercise their options in full (which generally happens when there is high demand for said shares), here’s a breakdown of the biggest investors, plus that of creator and now Chief Creative Officer Alba:
• L Catterton: The investment firm poured $200 million into the company in 2018. It got all of that back in the IPO, selling a stake worth $309.1 million. Still, it maintains the largest stake in the company among all shareholders ($273 million), for a total of about $582.1 million.
• Institutional Venture Partners: The second largest shareholder, IVP led Honest Company’s $25 million Series B round and also invested throughout several other rounds. It’s unclear exactly how much the investor put into the business, but its stake ($239.8 million) and the shares it sold ($19.2 million) nets out to around $259 million.
• Lightspeed Ventures: Having led Honest Company’s Series A in 2011, the venture investor continued to fund the company throughout its life, investing a total of $31 million across several rounds. According to the company’s IPO filing, Lightspeed sold a stake for about $23.2 million, but still maintains the majority of its position. That adds up to a cash and stock total of about $202.9 million.
• Jessica Alba: The founder of the company, Alba now holds a 6.6% stake in the business. That stake is worth about $129.8 million. She sold no shares in the IPO, and will also be awarded about $6 million in shares for the completion of the offering.
EquityZen co-founder Phil Haslett also aptly pointed out via email that, interestingly enough, Honest Company declared a cash dividend to several stockholders. L Catterton was issued about $13.1 million, IVP received about $4.9 million, and Lightspeed was issued $4.3 million. Jessica Alba’s share meanwhile was $2.6 million. Not something you often see in startups.
At any rate, Honest Company’s IPO also comes as Oatly, another consumer-facing business that has marketed itself as a sustainable brand, is ramping up for its IPO.
THE OTHER SIDE OF THE POND (MOON): Europe has been a venture capital hotspot in recent years. My colleague, Jeremy Kahn, details the genesis of a new fund dubbed Moonfire Ventures. Created by Atomico veteran Mattias Ljungman, the fund will invest in seed startups. Read more.
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