Axios Pro Rata

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.

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.

Office Depot (Nasdaq: ODP) today disclosed plans to spin off its commercial distribution business into a separate company, via a tax-tree transaction.

• Why it matters: This may help clear the path for an acquisition of Office Depot by Staples, whose 1996 and 2015 takeover efforts were thwarted by antitrust regulators. Staples, now owned by Sycamore Partners, made a third offer earlier this year that ODP rejected, but with the caveat that the board was open to future discussions.

• Bottom line: "ODP said it would retain its retail consumer and small-business products and services, while separating its Business Solutions Division contract unit and independent regional office-supply distribution operations." — Rick Clough, Bloomberg

• Honeybook, a San Francisco-based client and financial management platform for freelancers and solo entrepreneurs, raised $155 million in Series D funding at a valuation north of $1 billion. Durable Capital Partners led, and was joined by Tiger Global, Battery Ventures, Zeev Ventures, 01 Advisors and insiders Norwest Venture Partners and Citi Ventures. http://axios.link/cWBS

🚑 Cellares, a South SF-based cell therapy manufacturing platform, raised $82 million in Series B funding. Decheng Capital and insider Eclipse Ventures co-led, and were joined by Skyviews Life Science and 8VC. http://axios.link/ZS6w

• Firefly Aerospace, an Austin, Texas-based small satellite launch startup, raised $75 million in Series A funding led by DADA Holdings at a valuation north of $1 billion. It also says it plans to raise $300 million later this year, and that it completed a $100 million secondary (the seller was Noosphere Ventures). http://axios.link/DuaZ

🚑 Esker Therapeutics, a San Francisco-based precision medicine startup focused on autoimmune disorders, raised $70 million in Series A funding from Foresite Capital. www.eskertherapeutics.com

🚑 Headway, a New York-based software platform that helps therapists accept insurance and helps patients find those therapists, raised $70 million at a $700 million valuation. Andreessen Horowitz led, and was joined by insiders Thrive Capital, GV and Accel. BFD flashback.

• Vanta, a San Francisco-based automated security and verified compliance platform, raised $50 million in Series A funding. Sequoia Capital led, and was joined by YC. www.vanta.com

• StarTree, a Mountain View, Calif.-based cloud analytics-as-a-service platform, raised $24 million in Series A funding. Bain Capital Ventures and GGV Capital co-led, and were joined by insider CRV. www.startree.ai

• Zoe, a London-based personalized nutrition startup, raised $20 million in new Series B funding (round total now $53m). Ahren Innovation Capital led, and was joined by Accomplice, THVC, Daphni, Eli Manning and Osi Umenyiora. http://axios.link/A0E1

• Teachmint, an Indian online teaching platform, raised $16.5 million in Series A funding. Learn Capital led, and was joined by insiders Better Capital and Lightspeed India. http://axios.link/78hJ

• StudySmarter, a Munich-based personalized learning platform, raised $15 million in Series A funding. Owl Ventures led, and was joined by Left Lane Capital. http://axios.link/bvu1

• Sprout.ai, a British insurance claims settlement startup, raised £8 million in Series A funding. Octopus Ventures led, and was joined by Amadeus Capital Partners, Playfair Capital and Techstars. http://axios.link/Btyp

• Tame, a Danish virtual events platform, raised $5.5 million in seed funding led by VF Venture. http://axios.link/8PXX

• Relay Platform, a Toronto-based P&C insurance quote-bind-issue portal, raised US$5.2 million in seed funding led by Drive Capital. www.relayplatform.com

• Flextock, an Egyptian e-commerce and fulfillment management startup, raised $3.25 million in seed funding from YC, Foundation Ventures, MSA Capital, CRE Ventures, Alter Global, JIMCO, B&Y Ventures Partners and Access Bridge Ventures. http://axios.link/jrIw

• Cased, a San Francisco-based provider of compliance solutions for developers, raised $2.25 million in seed funding led by Founders Fund. http://axios.link/bb8S

• AeroCloud Systems, a British AI platform for airports to manage planes on the ground, raised $1.7 million led by Playfair Capital. www.aerocloudsystems.com

• 48forty Solutions, an Alpharetta, Ga.-based portfolio company of Audax Private Equity, acquired Relogistics, a Houston-based provider of pallet and container management services. www.48forty.com

• Altamont Capital Partners agreed to buy high-end fashion retailer Intermix from Gap Inc. (NYSE: GPS) for an undisclosed amount. http://axios.link/8FJN

• CDPQ agreed to buy a 30% stake in the European unit of American Tower (NYSE: AMT) for more than €1.6 billion. http://axios.link/Dr9t

• DCP Capital and Ocean Link submitted a revised takeover proposal for Chinese recruitment site 51job (Nasdaq: JOBS), valuing the company at around $5.3 billion. 51job co-founder Rick Yan is now working with the buyout firms. http://axios.link/jlUJ

• Kelso & Co. acquired C.L. Smith, a St. Louis-based distributor of rigid packaging solutions, and merged it with existing portfolio company Inmark. www.inmarkpackaging.com

• OpenGate Capital acquired the North American and European amphoteric surfactant business of Solvay (Brussels: SOLB), and renamed it Verdant. www.verdantspecialty.com

• Precisely, a Pearl River, N.Y.-based portfolio company of Clearlake Capital Group and TA Associates, agreed to buy Infogix, a Naperville, Ill.-based provider of data integrity and governance software. www.precisely.com

• Resource Label Group, a Franklin, Tenn.-based portfolio company of First Atlantic Capital and TPG Growth, acquired Cypress MultiGraphics, a Tinley Park, Ill.-based maker of labeling products. www.cypressmultigraphics.com

🚑 Day One Biopharma, a South SF-based pediatric cancer biotech, filed for a $100 million IPO. The pre-revenue company plans to list on the Nasdaq (DAWN) and raised $190 million from firms like Canaan Partners (21.2% pre-IPO staje), Access Industries (16.9%), Atlas Venture (16.9%), Millennium Pharma (12%) and RA Capital (5.9%). http://axios.link/7P4D

• Enact Holdings, a private mortgage insurance firm being spun out of Genworth Financial, set IPO terms to 22.6 million shares at $20-$24. It would have a $3.6 billion market value, were it to price in the middle, and plans to list on the Nasdaq (ACT). http://axios.link/uOqB

• ForgeRock, a provider of identity management tools for the enterprise, hired banks for an IPO that could value the company at between $3 billion and $4 billion, per Bloomberg. It's raised $273 million from firms like Riverwood Capital, Accenture Ventures, Accel, Meritech Capital Partners, Foundation Capital and KKR. http://axios.link/wQJE

🍩 Krispy Kreme, the Winston, Salem, N.C.-based doughnut chain owned by JAB Holding and BDT Capital Partners, filed confidential IPO papers, per Bloomberg. http://axios.link/dvvP

• Manscaped, a San Diego-based maker of men’s personal hygiene products, is in advanced talks to go public via SPAC, Axios has learned.

• Equinox, the high-end gym chain and owner of Soulcycle, is in talks to go public at more than a $7.5 billion valuation via Chamath Palihapitiya's Social Capital Hedosophia Holdings Corp. VI (Nasdaq: IPOF), per Bloomberg. Equinox backers include L Catterton and Related Cos. http://axios.link/gUVe

• Valor Latitude Acquisition, a Latin American tech-focused SPAC formed by Valor Capital Group, raised $200 million in its IPO. http://axios.link/spY5

• Bill.com (NYSE: BILL) is in talks to buy Divvy, a Draper, Utah-based corporate spend management solutions, for more than $2 billion, per Forbes. Divvy most recently raised at a $1.6 billion valuation from Hanaco, Schonfeld, PayPal Ventures and Whale Rock. http://axios.link/6h5g

• Galaxy Digital, the crypto-focused firm led by Mike Novogratz, agreed to buy BitGo, a Palo Alto-based cryptocurrency custodian, for $1.2 billion in cash and stock. BitGo, which was previously circled by PayPal, had raised over $70 million from Valor Equity Partners, Craft Ventures, Redpoint Ventures, Inventures and Radar Partners. http://axios.link/24Em

🚑 Leonard Green & Partners is seeking a buyer for ExamWorks, an Atlanta-based provider of medical claims management services, that could fetch $4 billion, per Bloomberg. http://axios.link/1lFH

• Providence Strategic Growth hired William Blair to find a buyer for Government Brands, an Alpharetta, Ga.-based provider of government software and integrated payments that could fetch over $1 billion, per PE Hub. http://axios.link/RWkE

• Equity Commonwealth (NYSE: EQC) agreed to buy rival commercial investment trust Monmouth Real Estate Investment (NYSE: MNR) for $1.91 billion in stock. http://axios.link/pHt3

🚑 Mundipharma International, a British drugmaker owned by the Sackler family, is seeking a buyer for its China unit, which could fetch more than $1 billion, per Reuters. http://axios.link/tqRi

⚡ CarVal Investors of Minneapolis raised $490 million for a fund focused on credit and hard-asset investments in the clean energy sector. www.carvalinvestors.com

⚡EnCap Investments of Houston raised $1.2 billion for its first fund focused on renewable energy project developers. http://axios.link/Ir76

• Multicoin Capital, an Austin, Texas-based VC firm focused on blockchain and crypto startups, raised $100 million for its second fund. http://axios.link/4BrU

• Stride VC, a London-based seed firm, raised £100 million for its second fund. http://axios.link/iEJJ

• Veritas Capital raised $1.8 billion for a midmarket PE fund focused on companies at the intersection of tech and government. http://axios.link/qUZL

• Warren Equity Partners raised $673 million for its third fund. The midmarket PE firm focuses on companies that maintain, operate and upgrade infrastructure. www.warrenequity.com

• Ira Cohen is leaving Morgan Stanley, where he’s been a tech banker for the past 11 years, to join the family office of Vista Equity Partners co-founder Brian Sheth, Axios has learned.

• Cyril Abiteboul, former Renault Formula 1 team principal, joined the VC unit of Hardware Group (HCVC) as a venture partner. www.hardwareclub.co

🚑 Luca Santarelli, a CEO of VectivBio, joined The Dementia Discovery Fund as chair of its scientific advisory board. www.theddfund.com

• Go deeper: Investors are getting defensive about inflation