Business Startups Venture

Mattress Maker Casper Reportedly Eyeing An IPO

Sleep on its product, but not on the company: Online memory-foam mattress retailer Casper is looking for underwriters to pen a potential IPO, reported Reuters.

According to Crunchbase, the New York-based startup neared unicorn status with a $920 million valuation set during its 2017 Series C.

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Five-year-old Casper is a well-known leader in the market, with investors like Target, Institutional Venture Partners (IVP) and New Enterprise Associates (NEA). Actors Kevin Spacey and Leonardo DiCaprio, rapper 50 Cent, and NBA player Kyrie Irving have also backed the startup, according to its Crunchbase profile.

Casper is one of those rare startups that actually shares financial information, with reported revenue of more than $600 million from its launch in 2014 through the end of 2017. (We’ve reached out for updated numbers and will include those in this article if/when we get them.)

In July 2018, Casper CEO and co-founder Philip Krim told Crunchbase News he believed his then-400-person startup had “just scratched the surface in terms of sleep product innovation.” It has evolved from its initial direct-to-consumer model to also selling its products through brick-and-mortar retailers such as Target, Nordstrom, and Amazon in an effort to reach a wider market.

Trailing behind Casper’s $239.7 million in funding, other companies in the mattress space that have raised venture capital include London’s Simba Sleep ($82.3 million) and Virginia Beach, Va.-based Leesa ($32 million).

The chart below shows venture funding raised by companies that use the word “mattress” or “mattresses” in their short descriptions in Crunchbase. (For example, Casper’s one-liner is “Casper is a global sleep company that launched in 2014 offering perfect mattresses directly to consumers.”) Companies which make or market mattresses but don’t use that keyword in their descriptions weren’t counted.

To some, news the mattress industry is well, awake and lucrative might be surprising. Customers are leaning toward a more customized, personal experience, whether it’s with Casper, or other new startups like those mentioned above.

Apparently it’s working. As we reported back in July, of the $15 billion mattress market, online sales of mattresses reportedly doubled from 5 percent in 2016 to 10 percent in 2017. 

Still, it’s notable that after a whopping ten-fold jump in venture investing in mattress startups from 2016 ($25.7 million) to 2017 ($257.3 million), funding slid sharply to just $15.6 million in 2018.  Of course, Casper’s $170 million Series C in 2017 was a big factor behind the rise that year.

Illustration: Li-Anne Dias

This story was updated post-publication to include more accurate revenue figures based on company feedback.