
Casper lowers IPO price range, implying valuation of just over $500M - hhs
https://www.marketwatch.com/story/guid/36DEAAA3-5462-48EB-8C4A-3083DAFCF49D
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BoorishBears
Let me get this straight... Casper starts (or at least, helps start) the bed-
in-a-box revolution, and private investors get in early.

The moat they had was people don't buy a bed sight unseen off the internet.

They literally burn piles of money to normalize the act (100 day return
policy, 0 questions asked, insane marketing spend...)

They succeed in normalizing it...

But the fact is that any bozo can call a manufacturer and get literally the
same product out to your door for the same costs as them. They didn't have any
exclusive manufacturing process, as the boom of bed-in-a-box raged on,
_everyone_ benefited from economy of scale as this has taken off, not just
them.

There's no need for a cheap imitation, because what they sell is already the
cheap option.

And there are _very_ few mattress brands that have loyalty because people
don't buy beds for brands. Tempurpedic and Duxiana are the only two
manufacturers I can think of that I've ever seen leverage customer loyalty in
marketing, and there's a reason for that (they exist at a completely different
price point)

So now there's hundreds of these companies, and Casper's standing out of all
of them is not particularly special.

So they go public at a half a billion dollar valuation for a glorified drop
shipping operation and leave institutional investors holding the bag?

Is there something I'm missing?

-

[https://www.forbes.com/sites/laurendebter/2020/02/05/casper-...](https://www.forbes.com/sites/laurendebter/2020/02/05/casper-
cofounders-father-among-investors-paper-losses-ipo/#4917114c2a61)

Well I guess some of the private investors are taking a bath as well...

~~~
dirtyid
>Is there something I'm missing?

Without expensive marketing campaigns, word of mouth competitors on Amazon can
sell the same item for 1/3 of the price, shipped.

~~~
toomuchtodo
We bought a full sized foam mattress from Amazon for under $200; they even let
you spread the payments out over several months at no additional charge.

~~~
dirtyid
Yeah, I got a Zinus from Amazon a few years ago. I thought it was just a
generic brand that swooped in to capitalize on the craze, turns out they're a
40 year old Korean company that has specialized in bedding longer than Casper
has existed. For some reason, it feels better to buy a mattress from a proven
bedding company that adopted new technology than a new tech company that
decided to disrupt bedding. Keep in mind Casper has existed less than the
lifespan of a typical mattress. Their longevity is still a gamble.

~~~
toomuchtodo
That's the brand! Love the Zinus, very satisfied with it.

------
rchaud
The marketing for these mattress startups has always put me a bit ill at ease.
They're very slick, with attractive couples falling into a deep relaxing
slumber. They'll tell you everything about how awesome their mattresses are,
but won't actually give you a price.

Are they assuming that the general public are so interested in mattresses that
they'll go on the website to check it out, instead of just picking something
up at Ikea, or their local discount mattress provider?

They're all identical in how they pitch it too: lots of "science of sleep"
factoids and thousands of customer reviews (as if those can't be gamed).

I get the same vibe with them as I do with stuff like Dollar Shave Club; a
'lifestyle brand' that's hoping for an acquisition by an established brand.

~~~
Exmoor
If you're anything like me, your exposure to the marketing has come almost
exclusively through live-reads on Podcasts. I can see wanting to avoid price
talk for this format of ads because the listener may be listening months or
years after the episode was recorded and may be frustrated if they hear one
price mentioned on the podcast, but another when the go to the site.

~~~
rchaud
They plastered their ads all over the Toronto subway system in 2018 and 2019.
Yeah, they show up on podcasts as well, but thankfully you can still FFWD
through those, so that's not the primary point of exposure for me.

------
umeshunni
Relevant article about the online mattress industry:
[https://www.cnbc.com/2019/08/18/there-are-now-175-online-
mat...](https://www.cnbc.com/2019/08/18/there-are-now-175-online-mat..).
"“Barriers to entry are low, but barriers to profitability are high,” he said.
“It doesn’t take that much to design a mattress, a marketing campaign, put up
a website, and have one of these big companies like Carpenter do the
fulfillment for you,”"

The majority of bed-in-a-boxes outsource their manufacturing...They’re
literally calling around to producers saying, ‘we need a finished product and
here’s what we think it should look like.’ Sometimes, they don’t even know
what they want it to look like...Most of the outsourcing is to just four major
manufacturers

~~~
umeshunni
Looks like the article link is broken. Here's the actual link:
[https://www.cnbc.com/2019/08/18/there-are-now-175-online-
mat...](https://www.cnbc.com/2019/08/18/there-are-now-175-online-mattress-
companiesand-you-cant-tell-them-apart.html)

------
nickthegreek
Here is a good podcast on the Casper IPO from 01/25/20.

[https://www.ridehome.info/the-curious-case-of-casper-with-
da...](https://www.ridehome.info/the-curious-case-of-casper-with-dan-frommer/)

------
ulfw
It's a MATTRESS COMPANY. I mean seriously now. How is this hackernews
material?

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mettamage
Maybe it's me, but I fail to see how this is relevant to HN. The Market Watch
article doesn't say much other than what the title already states.

To showcase the irrelevance, let me just copy/paste the _whole_ article.

> Casper Sleep Inc. CSPR, +0.00% lowered the price range for its planned
> initial public offering on Wednesday to $12 to $13 a share from a previous
> $17 to $19, a move that reduces its valuation to just over $500 million. The
> company is planning to offer 8.4 million shares to raise $109.2 million at
> the top of the range. With 39 million shares outstanding expected once the
> IPO is complete, the company would have a valuation of just $507 million,
> below the $741 million it would have had under the previous price range and
> now less than half the $1.1 billion it garnered in its last private funding
> round. Eight banks are underwriting the deal, led by Morgan Stanley, Goldman
> Sachs and Jefferies. Proceeds of the deal are earmarked for growth and
> general corporate purposes. The company will list on the New York Stock
> Exchange, under the ticker symbol "CSPR."

~~~
Spooky23
It implies the market is more skeptical of the transformational power of a
standalone mattress maker.

It's relevant to the HN community!

You have a company that was valued over $1B during funding rounds that has
seen that valuation cut in half. That's an example of how the rise of the
mega-companies like Amazon and Walmart are suffocating new entrants. Your
reinvention of the lounge chair probably won't be a startup now, when Amazon
can have a knock-off pushed out the door in a couple of months.

~~~
dantheman
To be clear, they don't actually make the mattress.

