This week, direct-to-consumer mattress brand Casper reached unicorn status (with a valuation of $1.1 billion) with a $100 million round of funding, making it the third DTC brand this month to do so. The investment is going toward more brick-and-mortar stores—the company currently has 23 stores—and expanding internationally, particularly in Asia, Bloomberg reported. According to a statement from the company, Casper reached $400 million in revenue in 2018. The funding news came a day after Reuters reported that Casper was reportedly looking for underwriters for an IPO.
“We are in the very early chapters of our growth story as demand for Casper products continues to expand across the globe,” said Philip Krim, Casper co-founder and CEO in a statement. “Today’s financing accelerates Casper’s vision to become the world’s largest end-to-end sleep company.”
The funding included Target and a few other companies and individuals like Dani Reiss, chairman and CEO of Canada Goose, and Gordon Segal, founder and the former chairman of Crate and Barrel.
Part of Casper’s success—and how it reached unicorn status—can be attributed to being first to market as well as starting as a digitally native company, said Bob Phibbs, CEO of the consultancy Retail Doctor. Not only does Casper have the advantage of being the bed-in-a-box brand consumers associate with mattress buying, it also has the data to know who exactly their customers are.
“There is something that brands are really doing well who understand who their customer is and can execute it and say it really well,” Phibbs said.
Phibbs said Casper has solved a “pain point” of buying a mattress that other companies can emulate. For example, people take photos and share videos of a Casper in their homes which shows that consumers prefer to see a product “in the wild,” Phibbs said.
“[For] brick-and-mortar stores, this isn’t the death of them, but what it does say to them is if you’re not going to change how you sell the mattresses and think it’s putting in 50 models and lowering the price, you’re going to end up like Mattress Firm,” Phibbs said. “[The funding] does show that the market is definitely there for more people to get into that space.”
Brian Cleary, vp, solutions marketing at RedPoint Global, a marketing software company, added that Casper excelled because it “reinvented the customer experience” by providing an “omnichannel experience.”
“DTC brands like Casper are rewriting the playbook on how to connect with consumers,” Cleary said. “They are keeping up with customer’s pace and understand the impact of personalizing every touchpoint to drive engagement. As the market becomes more commoditized brands need to stand out and the best way to achieve this is by leveraging customer data to provide relevant touchpoints in cadence to where the customer is in their path to purchase.”
Casper is the third DTC brand to reach unicorn status this month—Glossier and Rent the Runway are the other two—which shows, Phibbs said, that brands “do really mean something.”
“The new rules of branding is it’s OK to be a small brand,” Phibbs said. “What we’re seeing is there’s a lot of money chasing the new way consumers are buying.”