Sources: Jessica Alba's e-commerce startup Honest Co. is working with Goldman Sachs, Morgan Stanley on an IPO
Lizette Chapman / Bloomberg Business :
Context & Ripple Effects
The Honest Company enters IPO preparation less than six months after its $100M raise at a $1.7B valuation, a round that made Jessica Alba's subscription e-commerce business one of the most valuable consumer startups of its cohort. Hiring Goldman Sachs and Morgan Stanley signals the company intends to test that private mark against public-market scrutiny.
The stakes of that test are visible in the surrounding coverage: later reporting showed sales stuck near $300M in 2017 and the company culling products to refocus on core categories, before an eventual $200M minority investment from LVMH-affiliated L Catterton. The IPO mandate sits at the hinge between the 2015 growth story and that harder operating reality.
First-order effects
- Goldman Sachs and Morgan Stanley gain lead roles on a marquee consumer-tech mandate, while Honest Co.'s investors move closer to a liquidity path for their $1.7B-valued stakes.
Second-order effects
- A priced Honest Co. offering would set the first public benchmark for celebrity-founded subscription e-commerce, forcing comparable DTC brands and their backers to reprice expectations against real disclosed financials.
Third-order effects
- If the pattern holds, high-profile consumer startups increasingly route through large private rounds into bank-led IPOs, with underwriters' timing decisions effectively arbitrating between a startup's private valuation narrative and its actual revenue trajectory.
The trend: Venture-backed subscription e-commerce brands are graduating from headline private valuations to public listings, with bulge-bracket banks deciding when the numbers can support the story.