UPDATE 1-Online mattress retailer Casper slashes IPO valuation


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(Reuters) – Casper Sleep Inc, the online mattress retailer whose investors include actor Leonardo DiCaprio and rapper 50 Cent, expects its initial public offering valuation to be well below the roughly $1 billion it commanded in the last funding round.

The logo of a Casper mattress store is pictured in New York, New York, U.S. March 27, 2019. REUTERS/Carlo Allegri

In a regulatory filing on Monday, the company said it expects the offering of 9.6 million shares to be priced between $17-$19 per share. At the top end of the range, the IPO will raise $182.4 million and give it a valuation of $768 million.

The company was valued at $1.1 billion based on a fundraising round in March 2019. The IPO will test investor appetite for loss-making companies that are being shunned by Wall Street following the WeWork debacle.

Launched in 2014, Casper is one of the online mattress retailers such as Purple, Nectar Sleep and Tuft & Needle that has squeezed the industry’s old players.

Led by its co-founder Philip Krim, Casper made its name by selling one “universally comfortable” type of memory-foam mattress, as opposed to offering different firmness options and designs. It now sells three different types of mattresses.

Investors hope that Casper’s increased popularity with urban millennials will ensure it does not share the same fate as Mattress Firm Inc, the largest U.S. brick-and-mortar mattress retailer that filed for bankruptcy protection in 2018.

The company brought in revenue of $312.3 million for the nine months ended Sept. 30, which is up 20% higher from a year earlier. For the same period, it posted a net loss of $67.3 million, expanding slightly from the prior year.

Casper said it would use a sizeable portion of the net proceeds to funding growth.

The New York-based company’s investors include retailer Target Corp (TGT.N) and investment firms Lerer Hippeau Ventures, IVP and NEA.

Morgan Stanley, Goldman Sachs and Jefferies are the lead underwriters on the IPO.

Reporting by Bharath Manjesh in Bengaluru


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