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Monday, Sep 25, 2023

Honest Co. Raises $100 Million at Reported $1.7 Billion Valuation

Updated: The Honest Co. has confirmed its latest fundraising round

Honest Co., a Santa Monica online retailer of eco-friendly and non-toxic household products, has raised a $100 million round that reportedly values the company at $1.7 billion.

The Wall Street Journal first reported the round on Thursday and the Honest Co. confirmed the raise Friday, though the company did not confirm the valuation.

The round was led by hedge fund Brook Capital Partners of Greenwich, Conn., with participation from AllianceBernstein, Fidelity Management & Research Co., Wellington Management Co. and Institutional Venture Partners. Goldman, Sachs & Co. was the placement agent for the transaction. The mix of institutional investors participating in this round – and the lack of VCs – hints that Honest Co. is gearing up for an initial public offering.

“This funding will enable us to expand our current product offerings, support the upcoming launch of Honest Beauty and further our goal of bringing Honest products to a greater number of households around the world,” said co-founder and Chief Executive Brian Lee, in a statement.

Honest Co. sells household products such as diapers and cleaning supplies. About 70 percent of its products are sold through its e-commerce site, with the rest sold in brick-and-mortar stores, such as Target and Whole Foods. The company also sells items through monthly subscriptions plans. The Honest Co.’s upcoming product line, Honest Beauty, will be a line of skincare, cosmetics and hair-care products.

Honest Co. raised a $70 million round last August, led by Wellington Management Co., that valued it at nearly $1 billion. The company’s revenue last year hit $170 million, up from $60 million the year before, Lee has said in previous interviews. He has also said the company is eyeing an initial public offering.

Lee co-founded Honest Co. with actress Jessica Alba, who has used her star power to promote the startup on television shows, social media and in advertisements. It is the latest in a series of companies Lee has launched, often with the help of celebrity personalities. Lee is a co-founder of online legal services company LegalZoom of Glendale, co-founded with famed attorney Robert Shapiro, and of online shoe subscription company ShoeDazzle of El Segundo, co-founded with reality TV star Kim Kardashian.

In July, Honest Co. signed a lease for an 83,000 square feet office space in Playa Vista, citing a need for room to grow. It plans to relocate from its current home in 30,000 square feet in Santa Monica early next year.

Technology reporter Garrett Reim can be reached at greim@labusinessjournal.com. Follow him on Twitter @garrettreim for the latest in L.A. tech news.

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