Jessica Alba’s startup Honest valued at $1.7 billion post fund raising

By | August 14, 2015

The retailer Honest Co. started by Jessica Alba and Brian Lee has raised $100 million in a recent round of funding which has raised the value of the company to $1.7 billion. The funding has increased the value of the company by 50% since its last fund-raising that took place a year ago.


Founded in 2011 by Alba, the startup aims to sell nontoxic or chemical free products like diapers and toothpaste to customers who are concerned about the materials used to make such everyday items. The customers are parents who are ready to pay a premium to avoid their infants getting exposed to harsh chemicals. The celebrity status of the founder served as an advantage to bring the brand to limelight along with some attention to her social responsibility goals.

Alba said, “I wanted clean, safe, effective products that were affordable and beautifully designed and I couldn’t find that in the marketplace. There was not really a family brand that spoke to me as a young mom.”

Having heard from one of the investors in the company, it is said that almost 80% of the company’s revenue comes from the customers who subscribe for a monthly delivery of the essentials. The company stated that its sales grew to $170 million in 2014 from $60 million in 2013. Nearly 75% of its good are sold online but the products are found in 2500 retail outlets like Walmart and Target stores.

Despite of the good business, Honest does face some glitches. Honest faced major competition from Amazon’s diaper brands which promised to be transparent about the material used and its origins. But it withdrew the diapers after receiving many complaints from its customers on the design. Recently, a complaint was raised that Honest’s sunscreen was not actually protecting the skin and caused a small girl to get burns on the skin. Alba replied that the lotion went through testing and government regulations before it hit the market.