• Steve H. Hanke
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    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

No Bubble At All: Jessica Alba's Diaper-Delivery Startup Is Valued At $1 Billion, Prepares For IPO

Tyler Durden's picture




 

While today even the pundits are aghast at the latest Snapchat valuation round, which according to the WSJ has Kleiner Perkins inject a laughable $20 million into the private-parts photography service, boosting its valuation to a whopping $10 billion in a clear windowdressing mark-up round, up from $800 million a year ago, even as the actual equity invested into the company is a paltry $160 million or under 2% of said valuation, the true indicator of just how bubbly the second coming of the dot com era has become comes courtesy of none other than Jessica Alba's, yes the actress, own startup: a company launched in 2012 and which makes "non-toxic" diapers (as opposed to toxic diapers?), called the Honest Co., has raised $70 million at a valuation just shy of $1 billion in preparation for an IPO. 

Ridiculous? Well of course, but at least unlike Snapchat which still has zero revenue, there actually are idiots who will pay a premium to subscribe to hemp diapers, and the company does in fact have some revenue: "since launching in 2012 with its non-toxic diapers and other natural baby products, the California-based startup has grown quickly by blending its environmentally sensitive products with a social mission. Annual revenue is tracking to hit north of $150 million in 2014, or three times the revenue of 2013, according to Mr. Lee. Roughly 80% of Honest revenue is from customers who subscribe to a monthly service delivering diapers and other consumable products on a recurring basis."

It appears the customers of Honest Co are so stupid, or just so lazy, they prefer to pay an exorbitant premium for a commodity product just so they have a monthly diaper delivery on their front step. In other words, a service for the 0.001%, which will continue to generate revenue as long as Fed's uber ZIRP bubble continues and allows such other ridiculous business models as Tesla to not only survive but prosper.

Some more on how Jessica Alba is about to be a whole lot richer:

Along with the healthy lifestyle and cleaning products, which will soon include formula for babies and beauty products for moms, the startup is selling a feel-good mission. Like Toms Shoes Inc., Warby Parker Inc., Etsy Inc. and other e-commerce companies that use business to benefit social causes, Honest donates product and revenue. The company established programs like diaper and crib donations as part of its business model, earning it a B Corp certification from nonprofit group B Lab.

 

“Nowadays it’s about corporate responsibility. The consumer today demands this of companies and we are doing our part to help in any way we can,” Mr. Lee said.

 

Although the company has expanded its retail distributors during the past year from Whole Foods and Costco to include Target, Buy Buy Baby and Nordstrom, just 20% of sales occur offline.

 

Mr. Lee said that mix is a good balance for the company for now and the company has intentionally held back on marketing efforts because it is now at capacity fulfilling orders. The Series C funding round will be used to bankroll growth both in the U.S. and abroad.

In other words, this is just like a "supply-constrained" Tesla, only for diapers.

“We believe being a public company is the best path for us going forward and it’s good to get that validation early on,” Honest Chief Executive and Co-founder Brian Lee said, noting that public-markets investor Wellington Management Company led the Series C round. “I can’t say when that will be, but we are definitely starting to think and act like a public company.”

The existing investors are the who's who of venture capitalist for whom the initial round equity checks is also known as pocket money:

Along with Wellington Management Company, a handful of unnamed public financial institutions also participated in the round, as did all existing venture investors, a roster that includes Institutional Venture Partners, Iconiq Capital, Lightspeed Venture Partners and General Catalyst Partners.

 

The Honest Co., which employs 275, previously raised $52 million. Through an Honest spokesman, Wellington declined to comment.

 

“Having them as shareholders will help the team understand the metrics, traction and other things public-market investors are going to look for as they enter the market. Having them inside the tent instead of outside the tent makes that dialogue much more open.”

And, of course, the exit event is quite clear: "General Catalyst Partner and Honest board member Neil Sequeira said working with Wellington to lead the round was logical because the goal is an IPO."

Clearly, to IPO, the diaper delivery company will need an even greater upside story. Enter, what else, China.

In preparation for an IPO, Jessica Alba’s The Honest Co., a maker of eco-friendly baby products, has raised $70 million at a valuation just shy of $1 billion and is beginning partnership talks to expand to China, Dow Jones VentureWire has learned.

 

Jeremy Liew, a partner with early investor Lightspeed Venture Partners, said Ms. Alba, the actress-turned-entrepreneur who co-founded the company in 2011, has leveraged her star power for the benefit of the startup.

 

“She is an international star. We’re starting to see a lot of demand from her fans around the world,” he said. “This idea for non-toxic, chemical free products has resonated around the world in developed and developing countries.”

To summarize: an "sexy movie star", a whole lot of VCs seeking to cash out to get-rich-quick morons who have forgotten all about the sad ending of the first dot com bubble, a company that has a "unique product", a ridiculous, laughable, bizarre "business model", even if ultimately it is used to simply contain shit pardon our French, and the piece de resistance, "China."

What else is there to say. We expect the stock to soar over 100% on the day of its IPO, but for now here are some gratuitous shots of Jessica Alba:

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Wed, 08/27/2014 - 12:22 | 5149505 Grande Tetons
Grande Tetons's picture

I might buy one share just to receive the annual report. 

Wed, 08/27/2014 - 12:26 | 5149520 whotookmyalias
whotookmyalias's picture

Jessica Alba.  Mmmmm.  Oh, did you say something?

Wed, 08/27/2014 - 12:26 | 5149529 jbvtme
jbvtme's picture

shape shifter

Wed, 08/27/2014 - 12:28 | 5149548 walküre
walküre's picture

Anyone here old enough to remember Robotrader? He had the privilege to post pics and his pics were usually the hot kind. Made one forget all about the shorting losses for a minute.

Wed, 08/27/2014 - 12:37 | 5149592 SumTing Wong
SumTing Wong's picture

I do remember robotrader. What fun he was.

As for the nontoxic type of diapers, I have two daughters not yet potty trained. There are many days I would have paid extra for them to have had nontoxic diapers. Something that cute shouldn't produce something that smelly.

Wed, 08/27/2014 - 12:48 | 5149639 NoDebt
NoDebt's picture

Listen, if there's a hot chick who happens to be into diapers, who are we to cast aspersions?

Wed, 08/27/2014 - 12:55 | 5149663 john39
john39's picture

all of the pics above ignore what is, imho, her best attribute...

http://youtu.be/BI3EZBatHYw

 

Wed, 08/27/2014 - 13:02 | 5149719 Grande Tetons
Grande Tetons's picture

Thank you.  Really....thank you. That is the best gift I have received all year. 

Wed, 08/27/2014 - 13:04 | 5149728 Pool Shark
Pool Shark's picture

 

 

Well, if you can't act; you might as well sell nappies...

 

Wed, 08/27/2014 - 13:10 | 5149745 Save_America1st
Save_America1st's picture

yep...smmmmmmmmokin' hot :-)

However...it's a little creepy and suspect that she would name the company "Honest"...that's usually a dead giveaway that the exact opposite is in play.  If she had put the word "Affordable" in there too, then I'd say run the other way fast with your investment capital.  But we can at least watch from the sidelines here on ZH and see how long it takes for it all to crash and burn.  Probably will go bankrupt due to some "DIShonest" business practices.  lol

Wed, 08/27/2014 - 13:10 | 5149759 Herd Redirectio...
Herd Redirection Committee's picture

One question: Does Jessica Alba deliver the diapers?

Wed, 08/27/2014 - 13:16 | 5149768 Save_America1st
Save_America1st's picture

she'll pooh in one for you for 500 bucks and give you 10 shares of "Honest Co." stock.

for those of you sickos out there who are "into" that.  LOL

Wed, 08/27/2014 - 13:21 | 5149814 SafelyGraze
SafelyGraze's picture

as most of you know, me and Jess used to be kind of a big deal

what you prolly don't know is that she turned out to be needy

really really needy

anyways, I wish her the best with the diaper modeling thing

ps no hard feelings about what you did to my tires

 

Wed, 08/27/2014 - 13:38 | 5149934 TheLooza
TheLooza's picture

i went to elementary school with that lady's husband.  He cheated in handball, he marries an international star and is now joinining the uber welathy class.  Iz not fair; he cheated in handball!

Wed, 08/27/2014 - 14:34 | 5150335 Four chan
Four chan's picture

the market has gone full retard.

Wed, 08/27/2014 - 21:16 | 5152104 Matt
Matt's picture

Six times revenue at, what, half the fiscal year? with 200% growth over last year.

Seems not quite the same as valuing companies that have no revenue yet at $X Billion or valuing companies like Amazon at 200 P/E.

Wed, 08/27/2014 - 21:37 | 5152183 mjcOH1
mjcOH1's picture

"One question: Does Jessica Alba deliver the diapers?"

 

For $1B she damn well better show up wearing one.

Thu, 08/28/2014 - 04:28 | 5152835 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

As a man with blond hair and blue eyes, I'll never understand the Western media's unhealthy obsession with blond hair and blue eyes.

Wed, 08/27/2014 - 14:40 | 5150381 TerminalDebt
TerminalDebt's picture

does she deliver them looking like that? I can see that worth the money

Wed, 08/27/2014 - 15:09 | 5150533 Wait What
Wait What's picture

i've seen her cruising around Malibutt in a tiny bikini, kids in tow.

someone with that many kids should not look that good.

...but chicks like her grow on trees around here, california (the coast, at least) doesn't tolerate ugly people.

even our nannies & diaper changers have to be at least 8s, which she is.

Wed, 08/27/2014 - 15:50 | 5150823 HoleInTheDonut
HoleInTheDonut's picture

No shit!  The closer you get to the coast, the hotter and thinner the chicks get.  I live about 20 miles inland, which works for me because I don't like them TOO thin.

Wed, 08/27/2014 - 13:42 | 5149950 GoatHerder
GoatHerder's picture

Wish I could have given you a one to the to the tenth power. I dont care who you are thats funny.

Wed, 08/27/2014 - 15:02 | 5150548 Wait What
Wait What's picture

Rule 34, bro, Rule 34. google it.

Wed, 08/27/2014 - 17:20 | 5151260 Mr. Magoo
Mr. Magoo's picture

I would be better off investing in VALTREX

Wed, 08/27/2014 - 13:06 | 5149739 TuPhat
TuPhat's picture

I think you mean the cave? right?

Wed, 08/27/2014 - 14:48 | 5150417 what's that smell
what's that smell's picture

that woman is possessed by the devil SEXY.

Wed, 08/27/2014 - 13:20 | 5149832 Bangin7GramRocks
Bangin7GramRocks's picture

Thank you.

Thu, 08/28/2014 - 00:17 | 5152593 pilager
pilager's picture

I've been buying her original startup from backpage..... Sented

Wed, 08/27/2014 - 14:19 | 5150194 Ignatius
Ignatius's picture

Fuck diapers, or The Jetson's flying cars we were all promised, when do we get the Jessica Alba robotic fuck doll?

Wed, 08/27/2014 - 12:51 | 5149651 aVileRat
aVileRat's picture

For those in the know, plenty has been written by SF/LA blinds on the shady shit Alba's company has been involved with overseas. Cliff notes: BBB delisted them for known fraud. Same guys who are her overseas vendors were charged with wire fraud & product scamming by the HK and Chinese gov doing a similar baby targeted product line around 2005.

Nice person, bad luck in acting, no sympathy for how she parlayed C-list into a bad mail-scam idea.

 

Wed, 08/27/2014 - 12:58 | 5149688 t0mmyBerg
t0mmyBerg's picture

Yes that is terrible.  Who cares though.  She is magnificently hot.  Reason fades.

Wed, 08/27/2014 - 15:43 | 5150778 Not My Real Name
Not My Real Name's picture

"Reason fades."

So does beauty.

Wed, 08/27/2014 - 15:52 | 5150835 Real Estate Geek
Real Estate Geek's picture

Well played, sir.  (Although he did kind of hang that one over the plate . . . )

Wed, 08/27/2014 - 14:09 | 5150123 DullKnife
DullKnife's picture

Anyone still doubt that the US Market is not in a bubble?

This Company is a BUY.

Production will flow.

Factory to be powered by natural gas.

Profits will swell.

Alba will come out of the deal smelling like a....er, well, nevermind...

 

Wed, 08/27/2014 - 13:10 | 5149763 Hippocratic Oaf
Hippocratic Oaf's picture

Robotradersmom has left the building too.

As for diapers, Diapers.com can't be beat. Next day delivery, discounts, wide range of products.

Wed, 08/27/2014 - 15:44 | 5150787 Clowns on Acid
Clowns on Acid's picture

Yeh but Jessica don't wear them...

Wed, 08/27/2014 - 14:13 | 5150161 seek
seek's picture

Loved Robo's pics, but he also had some pretty solid commentary on markets.

Wed, 08/27/2014 - 14:22 | 5150219 James_Cole
James_Cole's picture

Robo is much missed. Hated by most but one of the only guys who knew shit. 

Wed, 08/27/2014 - 14:42 | 5150402 NotApplicable
NotApplicable's picture

If only there had still been markets in existence then...

Wed, 08/27/2014 - 13:13 | 5149777 jballz
jballz's picture

This is great news. Jessica Alba will now be earning enough to support me and our children.

Wed, 08/27/2014 - 12:29 | 5149543 NOTaREALmerican
NOTaREALmerican's picture

Jessica Marie Alba (born April 28, 1981)[1] is an American film and television actress, model, and businesswoman. She began her television and movie appearances at age 13 in Camp Nowhere and The Secret World of Alex Mack (1994). Alba rose to prominence as the lead actress in the James Cameron television series Dark Angel (2000–2002) when she was 19 years-old.[2][3]

Alba later appeared in Honey (2003), Sin City (2005), Fantastic Four (2005), Into the Blue (2005), Fantastic Four: Rise of the Silver Surfer (2007) and Good Luck Chuck (2007).[4][5]

Alba has been called a sex symbol.[6] She appears on the "Hot 100" section of Maxim and was voted number one on AskMen.com's list of "99 Most Desirable Women" in 2006, as well as "Sexiest Woman in the World" by FHM in 2007.[7][8][9] In 2005, TV Guide ranked her # 45 on its "50 Sexiest Stars of All Time" list.[10] The use of her image on the cover of the March 2006 Playboy sparked a lawsuit by her, which was later dropped.[11] She has also won various awards for her acting, including the Choice Actress Teen Choice Award and Saturn Award for Best Actress on Television, and a Golden Globe nomination for her lead role in the television series Dark Angel.[4]

 

Wed, 08/27/2014 - 12:51 | 5149545 JRobby
JRobby's picture

Of course! Beautiful people (especially if you are a celebrity) are more successful in our youth/beauty driven society.

I mean you really have to take a massive dive (Charlie?) that would get most people imprisoned before you get completely dropped from the fun club.

 

I know, the truth hurts small dicked, troll like renters of flesh and happiness.

 

Wed, 08/27/2014 - 15:06 | 5150573 Wait What
Wait What's picture

are you knocking renting flesh & happiness?

How dare you, sir!?!

it's the only thing holding up GDP at this point.

https://www.youtube.com/watch?v=dw1oM7LBbxE

Wed, 08/27/2014 - 15:11 | 5150607 JRobby
JRobby's picture

Indeed it is sir!

 

Wed, 08/27/2014 - 15:53 | 5150846 zerozulu
zerozulu's picture

Yes, let me tell you as well, you cannot compete with two person in practical life. A lucky man and a beautiful woman.

Wed, 08/27/2014 - 12:26 | 5149521 Kirk2NCC1701
Kirk2NCC1701's picture

First Million-Dollar IPO buyer gets to spend a night with this virgin Billion-Dollar Baby.

But wear a condom, to long your position.

Wed, 08/27/2014 - 12:33 | 5149573 RockRiver
RockRiver's picture

Yup, she looks like a baron of industry.....

 

Wonder sho really thought this company up?

Wed, 08/27/2014 - 12:43 | 5149603 Bananamerican
Bananamerican's picture

OMG! Honest™ is literally a sack of shit!

Wed, 08/27/2014 - 12:53 | 5149654 Dame Ednas Possum
Dame Ednas Possum's picture

Here's the CEO bio snapshot.

http://1.bp.blogspot.com/-Pi-W38bLCOg/UWxT9HigZXI/AAAAAAAAAFM/O-yIr5aln-...

Clearly very qualified.

Wed, 08/27/2014 - 12:58 | 5149686 Z_End
Z_End's picture

Warning! NSFW!

Do NOT follow this link or you will be banned from the site!