Jessica Alba's Honest Co. Files for IPO

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

The Honest Company

The Honest Company, the packaged consumer goods company founded by actor Jessica Alba and serial entrepreneur Brian Lee in 2011, filed paperwork with the Securities and Exchange Commission Friday to go public.

Selling everything from eco-friendly diapers to skincare products, it has never turned a profit. The Santa Monica-based brand is seeking to raise $100 million by going public, a move which it has flirted with several times during its past few tumultuous years. It will trade on the NASDAQ under the ticker symbol "HNST."

The SEC filing reveals Honest recorded a net loss of $14.5 million last year, which was hardly unusual. It has carried over $243 million in losses since 2017.

"We have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future," the filing warns.

Honest revealed it increased gross margins by 35.9% last year with revenue soaring by 27.6%, to $300.5 million in 2020 from $235.6 million in 2019. The wellness category did especially well, bolstered by the pandemic which drove sale of disinfecting and sanitizing products. Revenue in that category skyrocketed 116%.

Much of Honest's business hinges on its partnership with two mega retailers, which accounted for 45% of its revenue last year. And 70% of all retail sales came from Target and Costco, where the company is competing for shelf space against larger, more well-funded brands.

"The loss of our relationship with Target, Costco or any other large retail partner could have a significant impact on our revenue," the filing warns. "We also face severe competition to display our products on store shelves and obtain optimal presence on those shelves. Due to the intense competition for limited shelf space, retailers are in a position to negotiate favorable terms of sale, including price discounts, allowances and product return policies."

Honest was rumored to be preparing an IPO in 2016, and Lee, who departed in 2017, reportedly had been thinking about it since 2014, but after soaring growth in its infancy, the company struggled amidst quality control problems and investors who had grown wary of direct-to-consumer businesses that had to compete against the likes of Amazon.

In 2015, Honest became a unicorn, valued at $1.7 billion. But two years later it was raised a dreaded down round amidst stagnating revenue.

Several incidents tarnished its central marketing promise as a safe alternative to traditional brands. The company voluntary recalled its baby powder and baby wipes in 2017 after concerns they could cause skin and eye infections. The year before, it reformulated its laundry detergent after reports that it misled consumers about ingredients.

Unliever was reportedly close to buying Honest in 2016 but ultimately decided to acquire one of its main competitors, Seventh Generation.

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Greater Good Health Raises $10 Million To Fix America’s Doctor Shortage

Keerthi Vedantam

Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

Greater Good Health Raises $10 Million To Fix America’s Doctor Shortage
Courtesy of Greater Good Health

The pandemic highlighted what’s been a growing trend for years: Medical students are prioritizing high-paying specialty fields over primary care, leading to a shortage of primary care doctors who take care of a patient’s day-to-day health concerns. These physicians are a cornerstone of preventative health care, which when addressed can lower health care costs for patients, insurers and the government. But there’s a massive shortage of doctors all over the country, and the pipeline for primary care physicians is even weaker.

One local startup is offering a possible answer to this supply squeeze: nurse practitioners.

On Wednesday, Manhattan Beach-based Greater Good Health unveiled $10 million in new funding led by LRVHealth, adding to $3 million in seed funding raised by the startup last year. The company employs nurse practitioners and pairs them with doctor’s offices and medical clinics; this allows nurse practitioners to take on patients who would otherwise have to wait weeks, or even months, to see a doctor.

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Plus Capital Partner Amanda Groves on Celebrity Equity Investments

Minnie Ingersoll
Minnie Ingersoll is a partner at TenOneTen and host of the LA Venture podcast. Prior to TenOneTen, Minnie was the COO and co-founder of $100M+, an online marketplace for used cars. Minnie started her career as an early product manager at Google. Minnie studied Computer Science at Stanford and has an MBA from HBS. She recently moved back to L.A. after 20+ years in the Bay Area and is excited to be a part of the growing tech ecosystem of Southern California. In her space time, Minnie surfs baby waves and raises baby people.
PLUS Capital​’s Amanda Groves.
Courtesy of Amanda Groves.

On this episode of the L.A. Venture podcast, Amanda Groves talks about how PLUS Capital advises celebrity investors and why more high-profile individuals are choosing to invest instead of endorse.

As a partner at PLUS, Groves works with over 70 artists and athletes, helping to guide their investment strategies. PLUS advises their talent roster to combine their financial capital with their social capital and focus on five investment areas: the future of work, future of education, health and wellness, the conscious consumer and sustainability.

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