What's the one thing Leonardo DiCaprio, Tobey Maguire, and Adam Levine all have in common? They're probably all making a killing in -- of all places -- the mattress business.
Casper, the mattress startup that has a huge lineup of celebrity investors, has raised $55 million from an investment led by Institutional Venture Partners (IVP), according to a PR Newsire on Tuesday. The company, reportedly valued at $555 million, is expected to continue growing as it looks to open a European headquarters.
The mattress market isn't known for being particularly fertile, but Casper has managed to carve out a prolific niche since its launch last year in April, when it earned $1 million in revenue after only 28 days of sales. The company's eponymously named signature product has not only been widely acclaimed for its proprietary design, but can also be delivered to any U.S. address in a mini-fridge-sized box -- free of charge.
"Casper's meteoric rise is the direct result of its exceptional ability to hit a nerve with alienated consumers," says Dennis Phelps, a General Partner at IVP. According to Phelps, Casper owes its success to an innovative business model that takes the inconvenient physical element out of mattress shopping.
Instead of trying a mattress in a storefront, which Casper CEO Philip Krim says can be "awful," his customers need only click a button -- no human interaction required. In New York, the mattresses can be delivered within hours of purchasing, either through UPS or by bike messenger. This hands-off ordering process, combined with a moderately priced, memory- and latex-foam mattress that comes with a 100-day trial period, has captured the attention of a younger demographic, as well as the financial support of high-profile celebrities.
The $55 million deal follows Casper's Series A investment round that brought in $13.1 million for the startup in June 2014. The company plans to use its current fundings of $69.5 million to improve its engineering process and expedite product launch.
Only time will tell as to whether Casper will have the same success with pillows and sheets -- its next venture. To be sure, it will have to compete with other similar startups like Brooklinen and Parachute, whose products have also seen a great deal of demand. But, if this deal is any indication, the company will continue to grow its share of the sleep market.