Honest Company may be raising a down round - JPKee.com

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The Honest Company, the five-year-old natural body and home care products company cofounded by the actress Jessica Alba, looks to be raising $75 million in new venture capital funding at $19.60 per share, according to a Delaware filing first spied by CBInsights and reported by Axios.

The amount is a far cry from the $45.75 per share price point of the company’s $100 million Series D round, closed in 2015 at what was reported at the time, by the WSJ, at a post-money valuation of $1.7 billion.

It also endanger’s The Honest Company’s coveted — or problematic, depending on your viewpoint — status as a so-called unicorn company. While boasting a billion-dollar valuation puts companies in somewhat elite company with other richly valued private companies, high-flying valuations can also limit a company’s exit options.

The Honest Company may have already proved too rich to at least one acquirer. Roughly a year ago, the outfit was reported to be in talks with Unilever about a potential tie-up. In a surprise move, Unilever opted instead to acquire Honest competitor Seventh Generation for $600 million.

Last year, the WSJ reported that Honest was generating $300 million in annual revenue after raising more than $220 million from investors, including General Catalyst Partners, Lightspeed Venture Partners, Institutional Venture Partners, Fidelity, Wellington Management and Hartford Financial.

The company has not enjoyed smooth sailing since, seemingly. Honest cofounder Brian Lee stepped down as CEO, replaced by former Clorox executive Nick Vlahos, in part to position itself as a more traditional packaged goods company. (Lee is a tech entrepreneur whose past companies include LegalZoom and ShoeDazzle.)

The company had also announced plans to cut 80 jobs in the first quarter of this year as it made plans to dive into more offline channels. Indeed, while at the outset, Honest sold its products exclusively at its own website, its various products are also available to buy at Target, Whole Foods, CVS, Nordstrom, and elsewhere these days.

The company has also found itself fending off a number of lawsuits over the years from consumer advocacy groups concerned about its product labeling. We talked with Alba about those suits last year in an on-stage discussion at our Disrupt show in New York.

We hope to have more on the new round soon. In the meantime, we’ve reached out to an Honest Company representative for comment.

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Author - Vikash Kumar