QUICK READ:
- After a restful private sleep… direct-to-consumer mattress unicorn Casper wants to go public.
- Casper isn’t profitable — despite $358M in 2018 revenues, its loss jumped to $92M.
- $80M: The amount lost on returns/refunds/discounts in 2019. That cost is 23% of its revenues.
- Casper wants to be the “Nike of Sleep”… but it’s really the “Peloton of Slumber.”
Casper wants to be the “Nike of Sleep”… but it’s really the “Peloton of Slumber.” Like Peloton..
Right now, it’s closer to the spin-bike startup that recently IPO’d:
- Both are dependent on 1 big, expensive product (mattresses/bikes)
- Both promise new things are coming (sleeping pills/rowing machines)
- Both may never become profitable (losses this year are bigger than last year)
- Both rest their future on connecting with you via technology (apps, apps, apps)
- Both depend on Millennials’ still loving health/wellness
This is just the beginning too. Casper intends to extend its brand with a push into wellness with supplements and other products related to sleep. This is more than crazy, it’s complete insanity.
Why?
The reason that Casper wants to file an IPO is that the investment groups who poured money into the start-up want their money back with interest. However, their balance sheet indicates that they are not a very well run company.
While most business start-ups are initially going to lose money Casper’s business model indicates that they are in dire need of some experienced business people. They are spending too much on marketing and the cost of returns is hurting their bottom line.
Peloton, Uber and a host of other start-ups seem to have forgotten that the objective of a business is to make money. It does require hard work but it also requires financial discipline.
