- Honest Co. would test rocky market for technology IPOs
- Previous funding round valued e-commerce firm at $1.7 billion
Honest Co., an online shopping startup co-founded by actress Jessica Alba, is working with Goldman Sachs Group Inc. and Morgan Stanley on an initial public offering, according to people familiar with the matter.
The recent rocky market for tech IPOs will be a factor in when Honest Co. decides to go public, said one of the people, who requested not to be named because the plans are private. Brian Lee, the chief executive officer and co-founder, has been discussing his interest in taking the company public since at least 2014.
Spokespeople for Honest Co., Goldman Sachs and Morgan Stanley declined to comment.
Technology companies mostly avoided the public markets last year, with the help of large private funding rounds that totaled $51 billion, according to research firm CB Insights. That malaise continued into January, when no companies went public. It was the slowest month for IPOs since December 2008.
Since Alba helped start the eco-friendly Honest Co. in 2011, the Santa Monica, California-based company has expanded from selling natural baby products to home cleaning and beauty items online and in stores, including Target Corp. and Whole Foods Market Inc. Honest Co. was the target of a class-action lawsuit filed last year in which customers claimed its products were deceptively labeled and contained unnatural ingredients.
A funding round last year valued Honest Co. at about $1.7 billion, according to a person familiar with the matter. The company’s backers include Fidelity Management & Research Co., General Catalyst Partners, Lightspeed Venture Partners and Wellington Management.