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
Months after Jessica Alba's Honest Company raised $100M at a $1.7B valuation, Bloomberg reports the subscription e-commerce firm has retained Goldman Sachs and Morgan Stanley to work on an IPO — the classic two-bank setup for a consumer brand testing public markets at unicorn pricing.
The arc matters because the debut never landed on that timeline: later coverage shows sales stalling at roughly $300M with flat revenue in 2017 and product culling, followed by a $200M minority-stake round from LVMH-affiliated L Catterton — private capital stepping in where the IPO was expected.
First-order effects
- Goldman Sachs and Morgan Stanley convert their advisory roles into potential underwriting mandates and fee pools if Honest Co. proceeds to list.
- Honest Co. gains a path to liquidity for its investors at or above the $1.7B mark set by its August 2015 round.
Second-order effects
- A listed Honest Co. would give public-market investors their first pure-play comp for celebrity-founded subscription commerce, forcing rival D2C brands to justify their own private valuations against its multiple.
- If growth wobbles before pricing, late-stage investors like L Catterton become the fallback buyers, repricing the company away from its venture-era mark.
Third-order effects
- The pattern here — bank-mandated IPO prep giving way to a private-equity rescue when sales flatten — points to consumer subscription brands facing a harder public-listing bar than their fundraising headlines implied, with PE increasingly the exit of last resort.
The trend: Direct-to-consumer subscription brands are learning that a $1.7B private valuation does not guarantee a public-market exit, as private equity absorbs the companies the IPO window passes over.