Casper Sleep

Casper Sleep has filed their S1. Here’s a overview

Fascinating how they pitched this. My concerns are it’s a very competitive space, there’s far too many of these types of mattresses. I kid you not, you can start a mattress-in-a-box business pretty easily. They are reliant on Chinese manufacturers which may get trickier depending on what happens with the trade war(s). What I would have liked to see is more of a play towards sleep tech and meditation tech as good well-being is essential for good sleep.

Ha, Casper was in this morning’s Weekend Read. Possible IPOS 2020.

2 Likes

Awww what. Didn’t get this weeks Weekend Read. Actually haven’t had one since they stopped… :see_no_evil:

1 Like

We’ll check this out, @saf, and make sure you’re on the list!

1 Like

I didn’t get it either

It’s a paid newsletter, so here are a few parts of it:

Casper, like all modern direct-to-consumer companies, is made possible by technology. Most obviously, Casper can sell over the Internet to anyone anywhere in the geographic areas that it covers. Just as important, though, are the ways in which Casper reaches customers: primarily through digital marketing, including search, social media, and, as most of you are likely aware, podcasts.

The problem with all of the tech-enabled customer channels, though, is that they are available to everyone. Indeed, the flipside of tech concentration when it comes to platforms and Aggregators is the democratization and commoditization of basically everyone else in the stack. That is how you end up with, as of August 2019, 175 different online mattress companies.

To put it another way, Casper is inviting investors to ignore all of the commoditization implications of tech-enabled direct-to-consumer business, and to instead focus on the power of branding in a world awash with choice. It is, from a certain perspective, rather audacious: the criticism of most direct-to-consumer tech companies is the increasing customer-acquisition-costs inherent in most products expanding beyond their core customer; Casper’s proposition is that marketing is, in fact, their advantage.

That right there also gets at Casper’s challenge: the company benefited from the anti-consumer nature of the analog mattress business, but is also still very much a mattress company. It sells a high-priced good that is only bought infrequently, and the advantage it is selling in its S-1 — its brand — only really makes a difference when consumers are making decisions more than every 10 years.

2 Likes

Thanks for sharing it @Phil. It changed my view on Casper somewhat.

Especially the part: “the criticism of most direct-to-consumer tech companies is the increasing customer-acquisition-costs inherent in most products expanding beyond their core customer; Casper’s proposition is that marketing is, in fact, their advantage.”

It is entirely possible that Casper became very good at it. I heard on a podcast (Acquired, thanks to this forum) that Booking.com became very good at it, too.

I know from my readings that also Freetrade is very cognisant of its marketing and customer acquisition spending.

1 Like

That’s a lot.

I look at EveSleep and wince when I see this.

1 Like

Whoa. Eve Sleep has fallen even further. It was like 1.75p when I last checked.

Any thoughts on their outlook?

Merger with Simba looks to be on the cards.

2 Likes

I read this piece on the mattress wars a few years ago and basically decided it was all garbage

It would be awesome to be able to see some stocks as soon as they hit the market.