Honesty just might be the best policy – at least it is for the Honest Co. and its eco-friendly, non-toxic baby products. The Santa Monica company announced Tuesday it raised $70 million in Series C funding as it prepares to file an IPO.
With $122 million total funding, 235 employees and projected revenue of $150 million this year, the Honest Co. stands as one of L.A.’s startup success stories.
Despite these numbers, entrepreneur Brian Lee, who co-founded the company in 2011 with actress Jessica Alba, said it’s still just a startup, one of many positioned to help Los Angeles get recognized as a burgeoning entrepreneurial city.
$70 million is your largest funding round to date. Does that mean an IPO isn’t far along?
I can’t say when an IPO will actually happen for the company. It really depends on so many variables such as market conditions as well as infrastructure to get our company ready for an IPO. I can say that we are truly starting to operate like a public company. But we’re not quite there yet.
I spoke with Jeremy Liew from Lightspeed Venture Partners, which has participated in multiple funding rounds for the Honest Co. He said this Series C funding, which should be the last, could carry you to that next milestone.
Absolutely, it will be our final funding round.
Rumor is that the round put the Honest Co. at a valuation a little under $1 billion.
I’d rather not comment. We’re still a private company. But let’s just say it wouldn’t be completely wrong.
Why go public?
I really think that this is a public market company. We started with the mission to create safer and healthier environments for everyone’s homes and families. To get to that type of level where we’re truly making an impact, we’re going to have to put this in the public market. We’re definitely a leader in the non-toxic family products space today. By taking this company public, we’re just really cementing this position and putting that flag in the ground. And we want to control our own destiny. We want to control our own ingredients and formulations and products.
Does the word startup even apply to you anymore?
I think so. In terms of time, we’re absolutely a startup. We’re just a very fast growth startup.
Los Angeles has yet to have that tech giant really represent the city. What would it take?
The city needs more capital, and the city definitely needs more talent. We’re not Silicon Valley. We don’t have grandfathers in Hewitt Packard or Google or YouTube. These are giants that have spawned off amazing talent and attracted loads of capital. But the more companies that can grow into billions of dollars in Los Angeles, the better. And with capital comes more talent.