Jessica Alba Led Start Up Snaps up $70 million in Venture Capital Funding
Hollywood stars are stereotyped as actors and not as businessmen. Now that view is changing thanks to a crop of young actors who are getting involved in a slew of business activities including startups. A number of celebrities like Leonardo DiCaprio, Justin Bieber, Jared Leto have launched businesses or are at least supporting them.
Leonardo DiCaprio has invested in Mobli, a photo sharing app and other ventures. Jared Leto is involved with Zenefits, a tech startup which provides human resource services like payroll, health insurance and benefits.
The latest celebrity to join is Jessica Alba, the star of blockbuster Hollywood movies like The Fantastic Four, Little Fockers and popular television series like The Office, Entourage and Dark Angel. Jessica Alba’s baby products company, The Honest Company recently snagged $70 million in funding from venture capitalists, Wellington Management Company and existing investors.
Celebrity investors add bling and popularity
Celebrity investors bring publicity to new companies and attract more capitalists. Stars like Leonardo DiCaprio have tremendous goodwill and people look up to them. On the other hand, Jessica Alba’s success is significant because we have seen many celebrity promoted companies flounder and sink in the past.
Her partner in the venture is Christopher Gavigan also the Chief Product Manager at The Honest Company. Mr. Gavigan was formerly CEO at Healthy Child, Healthy World, a non-profit NGO, which empowers parents.
The Honest Company sells eco-friendly and non-toxic baby products including diapers, body and bath products and non-toxic cleaning products. The company is just two years old and it is already valued at just under $1 billion. Till now, the company has collected a bounty of $52 million, including $25 million in the last round in November, 2013.
Where does The Honest Company go from here?
The founders have said that they will use the money to expand their company’s offerings as well as enter markets in other countries (there are indications that the company is poised to enter the Chinese market). There are also chances that the company will go public soon.
On the public offer, Brian Lee, company CEO has said that they were planning to take the company public because it seemed the right thing to do for the future and they wanted to add that validation to their company’s credentials. However, he was non-committal on a date for the public issue. He said that he could not place a finger on the date. However, the company is already starting to act like a public company, which will help it after it turns into one.
The company will soon achieve annual sales of $150 million, 80 percent of which will come from customers who have signed up for a monthly subscription of the company’s products. The company’s products are also available at a number of outlets including Costco, Nordstrom, Target and Whole Foods.