Startup Unicorn Casper Sets IPO Price Range to Dish Out 36% Loss to Prior Investors

Another money-losing, cash-burning, over-hyped unicorn in a ho-hum low-tech business (bedding retailer) tries to make it out the IPO window while it still can.

By Wolf Richter for WOLF STREET.

It’s tough out there for money-losing, cash-burning startup unicorns that have multiplied like rabbits in recent years. Casper Sleep Inc., which sells foam mattresses and bedding, filed its amended IPO prospectus with the SEC today, with further details on its hoped-for IPO. It will offer to sell 8.35 million shares – and up to 9.6 million shares if the underwriters exercise their over-allotment option in full – at a price range of $17 to $19 a share. An IPO price of $18 a share (with 39,178,344 shares outstanding) will give the company a valuation of $705 million.

This is down 36% from its pre-IPO valuation of $1.1 billion, set at the last round of funding on March 27, 2019, when it had raised $100 million. The share price that investors paid at the time elevated the company into the unicorn cloud.

The timing of that round of funding was very propitious: Two days before the now infamous Lyft IPO on March 29, whose shares plunged 10% in six hours, from the superbly artificial pop to the close. Lyft shares today, at $47.36, are down 47% from that IPO pop. And the IPO world hasn’t been the same since.

But investors in Casper made their deal two days ahead of that Lyft spectacle. These investors that plowed $100 million into the company at a valuation of $1.1 billion included prior investors Target, New Enterprise Associates, and Norwest Venture Partners; and new investors Canada Goose CEO Dani Reiss and Crate & Barrel co-founder Gordon Segal.

Since it’s founding in April 2014, the company has raised $340 million in seven rounds of funding.

Casper has always been about marketing. It sells foam mattresses that are shipped squeezed tightly in a box. All kinds of companies are selling foam mattresses. More recently, it has started selling sheets and duvets and pillows and what not, the kind of stuff that countless online retailers are also selling, including manufacturers in India selling directly to US consumers on platforms such as Amazon.

But Casper’s marketing – very costly marketing – was so effective that it came to my attention in November 2014, just months after its founding. At the time, I received a thick envelope in the mail, addressed to “Resident” and titled “San Francisco Offers.” I opened it! Whoever was trying to get through to me, made it. The envelop contained six glossy, multicolored sheets, each for a different company, all of them startups.

But one sheet caught my attention further. It showed a pretty girl in minimal clothing, sitting by herself in the middle of the glossy sheet, looking longingly at me with a mysterious smile. There was no text. A mail-order bride?

Once I flipped the sheet over, I saw it: “$50 credit” for a mattress. I re-checked the front of the sheet. Turns out, the white surface the girl is sitting on is a bare mattress, and there is the tiny Casper logo vertically attached to the mattress (which I circled in red).

In terms of name-recognition, this form of marketing was a stroke of genius. Since then, Casper’s marketing that it controls has become decidedly more family friendly, with little kids running around in the photos. But it is now heavily focused on marketing via social-media “influencers,” a form of marketing that it doesn’t control and that can go haywire, which is a risk outlined in the prospectus. Altogether, marketing is where the company spends about 36% of its revenues.

In its IPO prospectus, Casper today disclosed that revenues for the three quarters through September 2019 rose 20% year-over-year to $312 million. And to get that $53-million year-over-year increase in revenues, the company spent $114 million in “sales and marketing” expenses.

You see, selling mattresses and bedding is an uphill battle. Everyone is doing it. And so, you’ve got to spend two tons of money for marketing to get one ton of money in additional revenues.

And you know what’s coming. Despite the 20% increase in revenues, the company lost more money than a year earlier: $67 million for the three quarters through September, up from $65 million. OK, it’s small fry compared to the billions of dollars in losses of Uber and others. But Casper, despite its formerly $1.1 billion valuation, is just a small-ish online retailer.

After realizing just how tough it was to compete with everyone and their dog online, including manufacturers in India selling directly to US consumers, Casper decided in 2017 to open some brick-and-mortar stores, just when brick-and-mortar retail is melting down.

Casper, which also partners with Target and other brick-and-mortar retailers, including Costco and Hudson’s Bay Company, now has 60 brick-and-mortar retail stores in the US and Canada.

And the fund-raising round in March last year was specifically designed, among other things, to raise more funds to plow into brick-and-mortar stores. The idea is that you can try out a mattress. “We offer playful, semi-private trial houses in our retail stores and in certain of our retail partnership environments that simulate a sleep experience,” the prospectus says. Would that include the girl in the photo, or similar girls? The prospectus didn’t say.

But when an online retailer thinks that brick-and-mortar stores provide salvation from fierce global online competition, even as brick-and-mortar stores are melting down by the thousands due to that fierce global online competition, there has to be a short-circuit somewhere, either in the thinking process at the company or in the thinking process at investors.

The Casper IPO will test just how much appetite there still is in this market for money-losing overvalued cash-burn machines in ho-hum low-tech businesses, such as bedding.

Meanwhile, investors in the last round of funding, and all prior investors that had already booked the paper gains from that last round, are now contemplating something like a 36% loss if Casper can pull off the IPO at $18 a share.

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  96 comments for “Startup Unicorn Casper Sets IPO Price Range to Dish Out 36% Loss to Prior Investors

  1. Seneca's cliff says:

    Both my Son’s purchased Casper’s in the last 5 years. One of my sons lives in Brooklyn and does not drive. Casper flooded the Subway cars with advertising and shipped to his apartment in a box. The other lives in Portland and does not have a car either and liked the delivery in a box too. But now everyone and their dog delivers foam mattresses in a box so the good times are over for Casper and their investor’s.

    • WES says:

      Seneca’ cliff:. You didn’t answer the question!

      Did they get a Girl in the Box?

    • Cas127 says:

      Wolf,

      One broad advantage to the bed in a box tsunami of suppliers (despite IPO idiocy) – every sale puts pressure on traditional bedding manufacturers to lower their long insane pricing.

    • Thomas says:

      You can actually get spring mattresses compressed in a box. I got a queen one from Wayfair “it’s a online retailer” with delivery for only $120. It works very well with a combination foam and feather top mattress topper. Without the mattress toppers though it would be very floppy.

      • Morty Mc Mort says:

        Thomas! – Your late life male erectile issues are misplaced in this commentary thread!!

        • Thomas says:

          Morty,
          I’m under 30 so your assumption/joke is pretty off. I’m merely bringing it up, because, it’s relevant that not everybody is aware that cheap spring mattresses in a box are online for sale. The article might lead people to think only foam mattresses can be shipped this way. In fact both major types of mattresses, foam and spring are available cheap online, but spring ones do basically require mattress toppers. This makes Casper even more of a ridiculous company.

        • RangnarD says:

          I think the girl in the box would make it even firmer than the mattress topper.

  2. Stan getz says:

    Another 50 Bil in Repo today. Looks like the perception of abundant & instant liquidity must always be maintained.

    And in such a health economy & market.

  3. Freewary says:

    Wolf , thx for recommendation I’ll put I’ll my $ into Casper shares!

    • Wolf Richter says:

      Freewary,

      Yes, by all means, please do. These companies need your cash. Without new cash from you and other investors, they will run out of fuel to burn and would have to shut down.

      • Pedro says:

        Not exactly , after IPO so long as the shares don’t collapse to zero in a few weeks they typically go to the junk bond market and load up on debt with their “heathy” cash balance sheet, by pledging corporate assets or warrants on shares to compensate the bond holders in bad times.

        Junk bonds is where these zombie companies rake in the cash. Ipo money is just the first taste of liquidity these days, the public listing is what provides them a license to borrow at attractive junk bond market rates of 3-5%. Historically this was closer to 10%. But alas we live in interesting times.

        • Cas127 says:

          “borrow at attractive junk bond market rates of 3-5”

          Junk at this yield is utterly insane – if issuer goes BK in yr 7 (there is a reason these bonds are called junk) buyers get 7*4 pct back as interest and 20 pct of their unsecured bond principle (typical pre ZIRP recovery).

          So, buying a 4 pct junk bond wins you the right to get back about 50 pct of your original investment.

          Hookers and blow return zero but are a lot more fun…

      • Trent says:

        so a ponzi scheme?

  4. Unamused says:

    Casper Sleep Inc., which sells foam mattresses and bedding

    One of the great consumer marketing scams of all time has been to persuade people to spend extra on a bed that is made of what is essentially disposable packing material which was formerly used mostly to ship furniture and sensitive equipment.

    • Thomas says:

      Definitely, in the city I live in, a typical mid-sized city in the midwest; there are a dozen or so mattress stores. Most of them sell mattresses that cost up to $5,000, maybe a bit over that even “I think box spring included”. Most of the mattresses at these stores cost $2,000 and up. This is not a rich city, but they do offer payment plans.

    • MC01 says:

      The Dunlop process to manufacture latex foam mattresses was patented in 1929 and Dunlop started selling foam mattresses under the Dunlopillo trade name in 1933.
      The Talalay process was patented in 1949, and is a variation of the Dunlop one. Again it was invented exclusively to manufacture mattresses.
      Polyurethane (“disposable packing material”) was patented by Charles Price of Notre Dame University in 1958.

      These high end mattresses are made of natural rubber, just like the original Dunlopillo, albeit to cut costs (for the manufacturer, not the customer) many are now made from a mixture of natural rubber and styrene-butadiene.
      In short these folks are selling decades-old technology for what I can only call enormous amounts of cash.

      But as the saying goes people will pay any price for the old soup if the cook changes its name.

      • Ripp says:

        Exactly, just tons of investor cash thrown at fancy marketing. I work across the street from a latex mattress manufacturer. They started selling them online in 1998 and mailing them compressed in boxes all over the country.

        This is not a new idea.

        • Wolf Richter says:

          Yes, the idea has been around. I made my own foam mattress and bed back in college when I lived in a dump and didn’t have any money at all (1970s): cinder blocks (9?), plywood on top, and two layers of different types of foam on top. Softer than a classic futon on tatami, harder than a bed. I slept great.

    • Deanna Johnston Clark says:

      They aren’t buying the mattress. Clean, disinfected almost new mattresses by the score are for sale at charity places…donated by hotels and motels.

      Casper is selling “cool” with “hotties” available with a click of an Iphone.
      Reality vs trope is ruining young people and making credit cards soar.

      Coach purses are unattractive and impractical but the waitresses at my daughters restaurant…mostly from Eastern Europe because it’s a Greek restaurant…will get a new card and run out for a $2000 purse to brag about on FB. How can such people be saved from themselves…the eternal question!!

      • Trinacria says:

        nothing can save people from themselves…ask Darwin. The next financial hangover that is seriously brewing right now will work wonders as an economic Darwin; will cleanse this stuff for a number of years, then it will start over again. Gird your loins as in scripture is nowhere remotely close to the radar of so many folks. All just so “nuckin futs”.

      • Petunia says:

        Buying a used mattress is a bad idea. The horror stories are legendary.

        I like Coach, especially the last couple of years. They were great years ago, then fell out of favor, but are great again. The Coach flagship in NYC just shut down. I hope Coach survives the retail apocalypse, it sells good quality at affordable prices.

        • DanS86 says:

          Amity Leather (aka AR Group) was run into the ground by new owners in the late 1990’s. It used to make the best wallets and such. Was located in West Bend Wi.

  5. Raymond Rogers says:

    Well at least they are aptly named.

    Casper- we have your money and take off like a ghost.

    • Thomas says:

      To be fair though,

      Their mattresses are cheaper than the vast majority of mattresses available in my city, see my above comment.

      They are available at target and are the only mattresses target sells “in store I think” because they neatly fit in the store. Target sells everything else bed related so it makes sense for them to complete the section. Not sure why target doesn’t just have their own brand of mattresses in a box; mattresses in a box are available in foam or spring “spring mattresses in a box should have mattress toppers though”.

      Most people though could just get mattresses online for far cheaper though.

      • Paulo says:

        Costco sells top of the line mattresses (and other products) with free delivery if you have exec membership. As I live 100km from Costco, it works for me.

  6. Michael Gorback says:

    If you sleep on a Casper mattress, take Uber to work and Lyft to go home you’ve used 3 losers.

    • Lune says:

      Those are rookie numbers. While at work, use doordash to deliver a beyondMeat burger for lunch, then cook your Blue Apron delivered meal for dinner, which you eat while watching Netflix. That’ll get you to 7 :)

    • andy says:

      Or put another way, investor groups have subsidised your lifestyle 3 times in one day!

      • Pedro says:

        One of them will survive and be the next Netflix, Apple or Tesla. This is capitalism at work. You have to accept these cycles if you accept the value you derive from all the companies that made it using investor cash in the early days.

        I would guess 70% of your discretionary spending is on FAANGMAN companies. All investor fueled, subsidized at some point in their history.

        • Another Millennial says:

          No way, 70% is probably at Walmart and the dollar store. I appreciate cheap crap that entertains the kiddies.

        • Thomas says:

          It’s true that some companies like Tesla or Netflix might eventually make a ton of money, but, some companies like wework are designed in such a way that they literally never can even stay afloat without constant investor money. Wework is actually a knockoff off an older company named regus that’s been around for decades, but with a flashier design, and a terrible business model. Casper doesn’t own anything worthwhile. At any point target and other stores could dump them for their own brand; or in the case of online stores, just suggest and push you towards their own brand. Casper is just a brandname. When you buy into something that looks overpriced they better have a great business model, potential great intellectual property, or you got an inside tip. Or just gambling like everyone else.

  7. nick kelly says:

    Mattresses!!! Jesus the very word is scary…kind of like radioactive. Was it an outfit called Mattress World that had so many outlets it was suspected of being a front for….something? .

  8. Cobalt Programmer says:

    Just as I thought, there is no mattress king stores near me, in addition to the retail giants like walmart and target which also now includes amazon and online retailers, we got a new unicorn company selling mattress.

    The social media “influenzer” thing is getting out of hand. Every one is having a youtube channel, premium snap and instagram. Everyone is a influenzer. I dont know how many people they really influence with product placement (scantily dressed with a large cup of half -decaf mocha latte with cream on the top). We are running out of real buyers. This is similar to part time insurance agents of olden times.

    What is your job and experience?

    I was a blogger, youtube channel runner, instagram influencer and now everything is passive income baby…

    • MC01 says:

      I hope one day Wolf will run a piece on social media influencing because it’s big money, especially yuan, and it gets bigger by the month.
      I basically live under a rock, but recently a headline caught my eye: in Q4 2019 there were over 20 million influencers in China and their combined revenues passed 5 billion yuan. Unless one believes the fanciful numbers originating from the Chinese government or the snake oil salesmen in our media this is one of the few areas where there’s still real growth and everybody wants a piece of it, from Alibaba to Procter & Gamble. In fact even the Chinese government is considering allocating a budget to social media influencers. It’s beyond crazy.

      Influencers are seen as the everyman’s counterparts to celebrity endorsements: if one of these big Chinese influencers somehow misleads his viewers, unwillingly or else, he will be grilled mercilessly on social media and may even have to personally compensate his viewers.
      Think about Hollywood celebrities or sports stars being taken to task because the make-up product or car they endorsed are a piece of junk. Right.

      • Deanna Johnston Clark says:

        These are the people creating the tropes that put a stigma on wholesome common sense. Part of that is huge snobbery that sells, for instance, $20,000 implants that wobble when you pass 55 and lose even a little calcium.

        Making a list of these, including those created by Hollywood Glam machine, would take days. Think of everything stigmatized today by such “everybody’s doing it” and “everybody knows” …just the powerful word “UP” works magic in American ears. Upscale, Upgrade, on and on, conjuring $$ out of plastic.

      • Cobalt Programmer says:

        Previously everyone watches TV in a prime time. So, companies paid huge money for 30 seconds advertisement. Now everything is online and social media. It makes sense for paying the influencers. This is prevalent in niche areas like make up, startups, dieting, multi level marketing and others. Once a person reaches a many followers like 10,000 or 20,000 or some, he will be qualified to have product placements. Like a chain coffee in his hand, or a make up product, wine, bathroom products, diet suppliers and so on. They might get a flat fee or based on number of views/clicks. There are models, super models like Kim Kadharshian, Kyle Jenner and several others. Sometimes number of followers and ad clicks and views are fake, I don’t know how they do it.

        The worst case of this, is a Belle Daphnie bathwater sales. Her bath water was sold online and she was arrested. Lot of people believe the income will be steady but once economy tanks, the social media is replaced they must reduce their passive income stream or worst go back to real work.

        Lot of young people talk about FIRE financial independence retire early with huge positions on the stocks, lean FIRE retire without any huge positions. These guys must come back to work when the economy goes to recession.

        • MC01 says:

          Influencing is a very complicated phenomenon, going far beyond the mere product placement: in fact in China it became so big because ordinary consumers have been cheated and scammed so many times by dishonest advertisement and celebrity endorsement they want to hear from ordinary people like them.

          Bear in mind that if an influencer takes money to say something that is not true he/she is running huge risks: you may not have ever heard of Li Jiaqi but he’s a mega-star in China, so much even Jack Ma wanted to appear on Li’s online show. While he started out testing make-up products he soon became such a hit he was asked to review everything, from pencils to cookware. And he was almost destroyed by a single review that led his viewers to believe he may have been paid to promote a defective product.
          Li somehow survived the scandal but he cannot afford any more mistakes: if he betrays them his viewers will break him like hounds upon a hare.

          A Hollywood “celebrity” has none of these issues because celebrities exist in a parallel universe which sometimes he/she leaves to peddle products he/she doesn’t care about. If the perfume turns out to be a dud or the car turns out to be another Morris Marina, who care as long as the cheque clears.
          But the Chinese influencer has to care about what he/she promotes, because his viewers trust him/her to tell the truth: if he betrays them those royalty cheques from Taobao will stop coming. As Colonel Khadafi said, this is genuine democracy.

        • FluffyGato says:

          “These guys must come back to work when the economy goes to recession.” True.

          And when the economy goes into recession, there are far fewer jobs available.

  9. gorbachev says:

    As long as some IPO’S make it big there is always

    hope because I’m not missing the next one.

  10. 2banana says:

    WeSleep?

    • Cas127 says:

      Wolf,

      “The Mattress Firm” was useful in one major regard – when something does not seem to make sense (single company’s single pdt stores on every friggin intersection…with a pdt you can’t eat) there is a better than decent chance some internal scam is being run *and* some BoD level scam.

      “The Firm” had both – little thieves inside were stealing from bigger thieves at higher level – who were defrauding the public.

      You usually don’t find complete cultures like this outside of DC…

  11. Paulo Zoio says:

    I think I’ll advise grandpa’s grocery store down the street to IPO his business and make him a billionaire. It’s easier than winning the lottery…And I’ll recommend myself as his financial advisor :-)

    • Deanna Johnston Clark says:

      Better to spend your life bagging onions than being a selfish fake scorned on honest money sites. Confucius say….

  12. Wolf Richter says:

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  13. Rcohn says:

    Within the next few years, stocks will be in a major bear market and there will be NO MORE money for IPOs like these.
    The basic idea behind these IPOs is that the company will be self financing via future stock secondaries. When the stock price no longer permits this , the company will lose its source of financing and will go belly up.
    When IPOs are no longer viable at silly prices,the secondary effects will cause major negative ramifications for housing in the BAY area and the NYC metro

  14. David Hall says:

    I bought a faux leather recliner from Wayfair.com for about $150. It came in a box, some assembly required, not a bad deal. Would not go to a furniture showroom looking for one.

    Casper is a small cap company. The least company in the S&P 500 was worth over $4 billion recently.

    I used to follow small mining companies that claimed to have land in a regional trend that might contain rich ore, took investors’ money to do more prospecting, then closed shop when they could no longer pay their bills. I avoid small cap start ups.

  15. Willy Winky says:

    Wolf — you missed something here.

    That logo is velcroed onto the mattress, and if you pull the tab, behind it you will find a lockable space with a patented in-mattress, fireproof safe that can be used to stuff USD, gold, or other valuable items to prep for the apocalypse.

    There is serious IP involved in this product that differentiates from run of the mill foam mattresses in boxes. That makes Caspar a buying opportunity on the dip.

    Reading articles like this leaves me with a feeling of despair. For this to be happening we are either living through Idiocracy or the last days of civilization.

    None of this makes any sense — yet it is happening.

    • Cas127 says:

      “serious IP involved in this product ”

      Sure, the mattress itself does not turn a profit, but it *tracks* all mattress activity – data that is highly lucrative (Buyers – NSA, Depends, Bed Bug B Gone, wives…).

      Also, bed is entirely solar powered and can dig tunnels.

      • stan6565 says:

        ….and the proprietary *mattress-activity-tracking* *tm* system can be automatically uploaded to YouTube and snapchat (senior stockholders will be allowed to opt-out) and hey presto the extra income stream is thus born..

        • Willy Winky says:

          Breaking News: Caspers has developed a mattress that can convert ‘rhythmic motion’ into renewable electricity that can be used to charge your Tesla for free.

          Caspers, Tesla and Pornhub have announced a partnership promoting this innovative mattress.

    • Deanna Johnston Clark says:

      All you have to do is put the word “up” in front of a product…Americans will buy it.

  16. Just Some Random Guy says:

    I have a Casper. Very nice, wake up refreshed every morning, no sore back or anything. No idea what their finances are like, but their product is pretty damn good.

  17. WES says:

    I am planning on launching an IPO for my new company “Money in a Box”!

  18. Petunia says:

    Some company called Waitr was in a bunch of hurt today, layoffs and consolidations.

    • stan6565 says:

      :)

      you sure picked a winner there. Waitr shares were $13 in March 2019, just after their IPO. The shares are valued at $0.38 today.

    • MC01 says:

      Waitr is just another meal delivery outfit: amazing how they are crashing and burning all over the place among cutthroat competition and failed IPO, yet they never seem to go bankrupt.
      It means somebody is not just still lending them money (there have always been lenders specializing in this kind of distressed debtors), but lending at such low rates these outfits can still stay above water, albeit barely so.

      This is even more amazing considering meal delivery outfits have very little in the way of assets that can be posted as collaterals: I am not saying this stuff is unsecured debt but it’s not too far away.

  19. roddy6667 says:

    An IPO these days is not supposed to fund a viable company that makes a usable product or service at a profit. It is only purpose is to enable the principals to walk away from a dumpster fire with a billion dollars in their pockets, most likely headed to a country without an extradition treaty.

  20. CB says:

    Sort of reminds me of “My Pillow” run by heavy marketer Mike Lindell. Heavy advertising, so much that he’s almost a household name for those that listen to talk radio.

    • p coyle says:

      i got some my pillows after everyone else in my family tried them out and hated them. turns out i love them. i would happily have paid $10 for the pair.

  21. Nikki says:

    Yeah, I’d don’t get the whole Casper concept. There’s like nowhere to sync my cell-phone with it.

    • fajensen says:

      If only they could somehow make the material ‘smart’ and sync it with Pornhub …. I bet that somewhere, in some university lab, someone is working on this!

  22. Jason says:

    Who are the auditors that sign off that these companies are going concerns (if they do) in the prospectus? and do they prepare their Financial Data in the prospectus using GAAP?

    It usually is one of the Big 4 who are Too Big to Fail…….

  23. Lt says:

    In my neck of the woods, I’ve noticed that in every new strip mall that pops up there are two commonalities: mattresses and dentists. I suspect we have too much of both.

  24. FinePrintGuy says:

    If you buy a mattress from Macy’s, they will also haul away the old one free.
    I doubt the UPS guy would be amused if you asked him to do the same when he delivered your Casper…
    Have fun man-handling that mattress to the dump yourself.
    Casper mattresses are for the rookie buyer.

    • Ripp says:

      Around here, you just schedule a Salvation Army pickup. They’ll come to your house and take whatever you want for free. Mattresses included as long as they aren’t ripped or stained.

      So free removal plus tax deduction if you’re so inclined.

  25. FinePrintGuy says:

    Also, that final investment round probably had all sorts of ratchets and min redemption prices. Alas, that just sucks value from common shareholders to preferred share holders. Employee option holders are going to cry cry cry…

  26. TonTon says:

    A scantily clad, pretty girl looking desirously at the consumer. How do these geniuses come up with such innovations?

  27. joe says:

    “this form of marketing was a stroke of genius”
    Sure for those that think with their little head.
    I fell for the Mr Pillow or whatever crap (recycled waste) once and will not fall again.
    Now I buy bedding that I have experienced at higher end hotels. Look at the tags when you find something really comfortable. Some really amazingly comfortable products available only from hotel distributors in quantity – so I bought 10 pillows. Worth it.

    • DanS86 says:

      I was skeptical of Mr Pillow pillows with that constant advertising. However, I decided to try them and do like them. Its important to fluff them every once and awhile. Never a sore neck since using a Mr Pillow. Even got the dog one and she loves it. Never pay full price though.

  28. c1ue says:

    There’s a really interesting article on the Baffler: Barons of Crap.
    Casper is mentioned as is the purported true story behind Dollar Shave Club.
    If half of what this article says is true, then what we’re seeing with these consumer goods unicorns is far less a marketing phenomenon or a business model revolution, but rather a 1% play: scions of the wealthy selling crap to each other while being subsidized huge sums by former fellow students at the expensive big name schools they attended together: https://thebaffler.com/latest/barons-of-crap-kaiser-schatzlein
    Professor Scott Galloway also has a blog posting on Casper – his math shows Casper losing $349 per mattress.https://www.profgalloway.com/casperhaps

  29. DanS86 says:

    Foam mattresses are a rip off. Quality spring mattresses with integrated pillow tops that are both ergonomic and comfortable can be had with box spring for ~$900 Queen.

  30. riverwind says:

    It’s amazing that you kept a piece of paper for five years and can still find it! Indeed a good advertisement.

    • Wolf Richter says:

      riverwind,

      Here at the global headquarters of the Wolf Street media mogul empire, everything is digital. There are no “pieces of paper” anymore, and everything that was ever digitized is kept forever and is easy to find :-]

  31. c1ue says:

    Casper’s S1 is also informative: 2018 revenue was $357M, but that is net of another $80.7M in refunds, discounts and returns. That seems like a lot, but maybe is not unusual for a mattress company?
    Overall, they’re selling $1 for 80 cents. Enormous marketing and general overhead costs.
    Accumulated deficit according to the S1 consolidated balance sheet: $300M

  32. Jcd3 says:

    There was an interesting article “The War to Sell You a Mattress is an Internet Nightmare” on Fast Company in October 2017 about the shenanigans and undisclosed conflicts in the mattress review/blogging world. It appears there may be more money in reviewing mattresses than selling them.
    Likely true in other products as well. Take all product reviews with a big grain of salt.

  33. Roger says:

    I have a Casper and love it. All so have Mr. Mikes pillows, they are great and can be washed and dried. Perfect.

  34. raoul says:

    Ah Hah!

    In the true spirit of Flula Borg, I detect an error in your analysis.

    Bedding is not a “ho-hum low-tech business” as any internet search for ‘schlafsystem’ will readily prove.

    The Italians make some interesting products as well.

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