Yahoo Finance Casper seeks to defy online mattress nightmares with billion-dollar US float
The online mattress seller Casper plans to go public as soon as this year, betting that it can counter a widespread loss of confidence in “bed in a box” start-ups that has hit British rivals Simba and Eve Sleep.
The US company, the most high-profile of a wave of companies selling foam mattresses over the internet, is working with bankers at Morgan Stanley and Goldman Sachs on a flotation it hopes will value it at more than its $1.1bn (£850m) private valuation, according to Bloomberg.
It comes a month after UK-listed Eve abandoned plans for a merger with privately-owned Simba that the companies they had hoped would help address brutal competition between mattress companies.
Dozens of companies selling foam mattresses that are delivered to customers’ doors have sprung up in recent years due to easy outsourcing of manufacturing. But the low barriers to entry mean companies are having to spend heavily on marketing and discounts to stand out.
Eve, which went public at 101p a share in 2017, last week slumped to a new low of less than 3p. Simba, which once target a £1bn valuation, raised funds at just £20m earlier this year. The two abandoned merger plans last month, with Eve saying it was focused on rebuilding its own business.
Casper, which was founded in 2014, has sought to position itself as a wider “sleep company”, selling pillows, bed frames and nightlights as well as mattresses. It has also opened a network of physical stores in the US, which it hopes will distinguish it from rival online mattress sellers.
The company did not comment on flotation plans. It has said it expects to be profitable on an EBITDA basis, a measure of operating profit, this year, despite making a loss on revenues of around $400m in 2018.
Casper’s investors include the actor Leonardo DiCaprio and the rapper 50 Cent as well as the US retailer Target.
