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Photo: Michael Loccisano/Getty Images

Jessica Alba today is starring in her first big-budget comeback story, as The Honest Co. will begin trading on the Nasdaq after raising $413 million in its IPO.

Why it matters: Honest, a "clean living" products company that Alba co-founded in 2011, is one of very few unicorns to lose their horn and then regrow it. It's also a reflection of how many direct-to-consumer startups have evolved into multichannel retail.

Backstory: Alba isn't just the celebrity face of a VC-backed startup. Instead, Honest was her idea — borne of breaking out in a rash from detergent that she touched while washing her baby's clothes. She soon connected with Brian Lee (LegalZoom, ShoeDazzle), who was an early investor and Honest's first CEO.

  • The startup was a quick hit, at the intersection of the DTC and environmentally-friendly product booms.
  • But problems soon emerged. Honest was sued multiple times in 2015 and 2016 for mislabeling its products (it settled some, while one was dismissed), sales began to slow and Lee was replaced as CEO by former Clorox exec Nick Vlahos.
  • Alba writes in the IPO prospectus: "Several years after our launch, I was facing another honest moment. Our rapid growth was compromising key business functions and we were outgrowing our infrastructure."
  • Honest also failed to secure an acquisition by Unilever, which instead opted to scratch its DTC itch by buying Dollar Shave Club and add green products by buying Seventh Generation.

Fast forward: Honest significantly cut costs, including headcount. It also expanded both its product offerings (including higher-margin items) and distribution channels. Plus, and this cannot be stressed enough, it managed to successfully go public — something that not too long ago looked less likely than "Flipper" winning an Emmy.

  • Revenue climbed from $236 million in 2019 to $301 million in 2020, with net loss cut in half to $14 million.
  • Alba is the company's chief creative officer, although is giving up her board chair role as part of the IPO. She will remain on the board of directors.

Caveats: Honest isn't a rocket ship. It generated $300 million in revenue for 2016, before a three-year dry spell, and part of the 2020 rebound could be credited to pandemic-induced buying. Plus, Honest focuses a lot on baby products at a time when U.S. fertility rates are plummeting.

  • The IPO gives it a fully diluted value of $1.6 billion, a touch below its private price in 2017.

The bottom line: Sometimes companies can claw their way back from being overvalued and overhyped.

Go deeper

2 hours ago - World

Brazil senators vote to recommend criminal charges for Bolsonaro

Brazilian senators vote on probe into President Bolsonaro's handling of pandemic. Photo: Gustavo Minas/Bloomberg via Getty Images

A Brazilian Senate committee Tuesday voted to approve a report recommending President Jair Bolsonaro be charged with a raft of criminal indictments, including crimes against humanity over his response to the COVID-19 pandemic, per AP.

Why it matters: Bolsonaro has become the face of a right-wing approach to the pandemic that includes repudiating vaccines and masks and resisting lockdowns and other mitigation measures. The Senate report holds him personally responsible for half of the country's 600,000 deaths.

Former Georgetown tennis coach pleads guilty to accepting admissions bribes

Gordon Ernst (left) former head tennis coach at Georgetown, outside a courthouse in Boston in 2019. Photo: Jessica Rinaldi/The Boston Globe via Getty Images

A former Georgetown University head tennis coach has pleaded guilty Tuesday to bribery charges related to facilitating the admission of prospective applicants.

Why it matters: Gordon Ernst solicited and accepted bribes from William Singer, ringleader of the cheating scheme uncovered by Operation Varsity Blues, and families in exchange for helping prospective applicants get into Georgetown as student athletes, according to the Justice Department.

6 hours ago - Health

CDC says some immunocompromised people can get fourth COVID shot

Photo: Noriko Hayashi/Bloomberg via Getty Images

The Centers for Disease Control and Prevention said in updated guidelines Tuesday that some immunocompromised people who have received either Pfizer or Moderna's COVID-19 vaccines will be able to get a fourth shot.

Details: People over 18 who are "moderately to severely immunocompromised" and have received three doses of an mRNA vaccine may get a fourth shot (of either the Pfizer, Moderna, or Johnson & Johnson vaccines) at least six months after getting their third Pfizer or Moderna dose, per the CDC.