Investors fear that a valuation of one billion dollars may pursue Casper’s IPO

Philip Krim’s obsession with a valuation of $ 1 billion for his budding mattress company may be about to fail.

The CEO and co-founder of the mattress company Casper Sleep has delayed the sale of the startup several times in recent years because it has been waiting for a price of $ 1 billion, sources told The Post.

Last year, the traveling mattress vendor who lost money held sales talks with some traditional mattress companies, none of which went anywhere due to Krim’s valuation demands, sources said.

Tempur Sealy, which sells the popular Tempur-Pedic mattresses, and Serta Simmons, a former mattress giant who has been struggling financially in recent years, both sought to buy Casper in 2019, only to retire when they learned the price of $ 1,000 millions, sources said.

“Serta Simmons had no money and Tempur Sealy had no interest,” a source said.

A spokeswoman for Casper denied that the company courted buyers last year, saying “Casper never looked for a sale in 2019.”

In 2017, the Recode technology website reported that Target had “serious acquisition discussions” with Casper, offering as much as $ 1 billion before deciding to take a minority stake.

Venture Capital sources now say that one of the reasons why the agreement talks may have been broken was that Target actually offered about $ 900 million, below Krim’s goal of $ 1 billion.

“I knew they were going to regret not selling Target for $ 900 million, but that was simply arrogance,” said a VC based in New York.

According to Casper’s latest fundraising round of February 2019, the private company based in New York currently has a value of around $ 1.1 billion. But there is a growing nervousness that the direct consumer dream company, which it presented last week to quote its shares on the New York Stock Exchange, could see that the valuation deflates like a cheap air cushion if it manages to go public.

Undoubtedly, Casper has grown rapidly since its inception in 2014, including revenue duplication between 2016 and 2018. The company expanded its brand greatly through high-profile marketing campaigns, including popular subway ads that represent street scenes. fanciful and entertaining word puzzles.

But like many new businesses, Casper loses more money than he earns and is trying to go public at a time when investors have been criticizing unprofitable companies like Uber, Lyft and WeWork office rental company.

In the first nine months of 2019, Casper lost more than $ 67 million in sales of $ 312 million, less than the $ 556 million in sales he projected he would win last year.

“At the end of last year, it seemed that things had changed,” said Matthew Kennedy, a senior OPI market strategist at Renaissance Capital. “But now it seems that there was no epiphany in which profits were needed.”

Kennedy believes that Casper’s public valuation cannot exceed that of its rival Purple Innovation, which is listed on the Nasdaq stock exchange and is currently valued at $ 577 million. Unlike Casper, Purple sells its boxed mattresses for more than $ 1,000, compared to the prices of $ 699 to $ 899 for Casper, and generates profits.

When Casper submitted his IPO documentation on January 10, it could not be valued in an unusual move that now has investors sweating, according to sources such as Ken Smythe of the private placement firm Artist Capital, which represents a client who invested in the last round of financing of Casper.

“He is worried about how the public will react to the IPO,” Smythe said. “Investors continue to largely analyze companies that are buying customers with increasing losses.”


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