Casper Mattress Files for IPO – Dreams of Future Sleep Economy

Casper logoOn January 10, 2020, Casper Sleep filed to go public on the New York Stock Exchange. Founded in 2014, that would mean they’d join bed in a box companies Purple and Leesa, which are both publicly traded after being bought out by larger companies.

Here are some facts from the filing that Unbox Mattress found interesting…

Casper sleep economyNote there is an affiliate link in this post.

  • Retail stores help boost online sales. Casper says on average they get about 2x the sales online in markets where there’s also a retail store. Casper is sold at Target stores and is in more than 2,000 stores, according to their website.
  • They’re not profitable and losses are steep – reports say that last year they were at $92 million.
  • Returns are a costly issue, costing about 20 cents for every dollar in sales and represents a key factor in their ability to be profitable. From the figures we read it looks like Casper has a 15-20% return rate, which is quite high.
  • What Casper does well is marketing and spending money on marketing. According to Fortune, “the company has spent $423 million in marketing since 2016.” And they report that for every $1 it spent on marketing, they bring in $3 in revenue. However, “more than 73% of its gross profit last year went to sales and marketing costs.”That’s gross, not net profit. In fact, when we reviewed Casper we were more taken by their marketing than the mattress. It’s not that it’s a bad mattress, it’s just it’s tough not to be in awe of their marketing. They are certainly creative and know how to leverage (and/or pay) influencers for placement. They’re almost more a marketing agency than a mattress/sleep company.
  • Casper bills themselves as a more than a mattress company but part of the global sleep economy. They’ve barely begun that journey. Right now though people usually buy a mattress and nothing else, but they have a long way to go in that category. The numbers, once again, don’t look promising at this point. According to Fortune, “only 16% of Casper’s customers who have bought a product through the company’s website or stores have returned to purchase another product.”
  • The IPO paperwork hints at future products and is far-reaching. This includes bedroom furniture, sounds (maybe they should acquire this bed company that seems to have never actually launched), scents, temperature and even sprays, pills or vitamins. Still, when you look at their website, it’s mostly mattresses and bedding. And new products have mostly been more pricey mattress models, like a hybrid. If the past predicts the future, it looks like we’ll see baby mattresses and cribs next.Casper products and services…are increasingly focused on non-traditional categories, including products that promote the ideal ambience for sleep, such as lighting, sound, scents, temperature, and humidity; sleep technology, such as tracking devices, medical machines, bedside clocks, and connected devices; sleep supplements, such as sprays, pills, and vitamins; and sleep services, such as digital apps, meditation, sleep programming, and counseling. Beyond the daily sleep needs of adults, we aim to meet a range of use cases with unique product and service needs, such as for travel, children and babies, and pets.

    As far as lighting, there’s the glow. It left us wondering, would you buy sleep supplements from Casper? And otherwise we don’t see a lot of tech. So far, Eight Sleep seems to be the leader in sleep tech, if not Reverie. So Casper has a long way to go (and needs a lot of cash to get there).

  • Casper “employs over 40 dedicated researchers, designers, engineers, and support staff…” focused on “the continuous improvement of existing offerings.” Honestly, we’d like to hear more about that than marketing.

The IPO sounds like a vision list of expensive dreams the mattress company has.

Our favorite part? A chart that highlights their wildly profitable beginnings: how Casper cofounder Neil Parikh delivered their first mattress by bike. They tweeted about it in 2014:

Casper bicycle delivery

Casper is a forerunner in the mattress industry and we wish them well in their IPO and future plans.

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