How Casper Became A $1 Billion Mattress Start-Up
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- เผยแพร่เมื่อ 11 มิ.ย. 2024
- "When Kylie Jenner posted about Casper I think it broke our website."
Introducing The Upstarts, a new series about the companies you love that came out of nowhere and are now everywhere.
People typically didn't get overly excited about their mattresses until Casper showed up five years ago.
Casper is the online mattress startup that launched in 2014 and quickly became a social media phenomenon, with celebrities like Kylie Jenner showing off pictures of their new mattresses on Instagram and TH-cam influencers posting "unboxing" videos where they excitedly pull a new Casper mattress out of a cardboard box after it arrived on their doorsteps.
"Oh my God, when Kylie Jenner posted about Casper I think it broke our website," says Neil Parikh, one of Casper's co-founders, about Jenner's March 2015 Instagram post, which garnered more than 870,000 likes.
Today, Casper is a billion-dollar mattress company leading the charge of online retailers disrupting an industry previously dominated by companies selling mattresses out of large warehouses. Casper's sales keep growing year-to-year and the company is even rumored to be getting ready to launch an IPO.
But, before Casper launched five years ago, the company's five co-founders struggled to convince investors that an online mattress startup could be the next big idea.
But Parikh and his fellow co-founders (including the CEO, Philip Krim, along with T. Luke Sherwin, Jeff Chapin and Gabriel Flateman) were convinced that they could help revolutionize the nearly $39 billion global mattress industry by designing a high-quality, custom multi-layer foam mattress that could be squeezed into a three-and-a-half foot-tall box and shipped across North America. (Casper mattresses start at $350 and go as high as $2,750, and you can try them out with a free, 100-day trial.)
Without any significant outside investments, Casper's founders first had to put up their own money and when that ran out use their own credit cards to pay for the most basic start-up costs, including manufacturing the first sample mattresses and paying to ship them to prospective investors.
"We were just, like, racking up debt. We put, like $50,000 to $100,000 on our credit cards, which probably was irresponsible. But, we were all in," Parikh tells CNBC Make It.
Casper's founders finally won over a group of venture capital investors who believed in the idea enough to give them $1.85 million in seed funding to get the idea off the ground in January 2014. The company officially launched in April 2014 and, even to the surprise of its founders, Casper sold out its entire inventory of mattresses (which, at the time, was still just 40 beds) on the first day the company's website went live.
The founders then had to scramble to fulfill those early orders. They waited for a truck full of Casper mattresses to travel from Casper's manufacturer, in Georgia, to their headquarters in New York City so they could quickly package them and ship them to customers.
Parikh and the other Casper founders had expected to sell about $1.8 million worth of mattresses in their first year, but instead they hit that number in just two months. That early success helped attract more money from big-name investors - including celebrities like Leonardo DiCaprio, Ashton Kutcher, Nas and 50 Cent - which, in turn, helped spread word about the brand.
In 2017, retail giant Target reportedly looked into buying Casper for $1 billion, but instead invested a reported $75 million in the company and started selling Casper products in its stores. Since launching, Casper has raised nearly $340 million from investors, and the company is currently valued at $1.1 billion, Casper said last month.
In 2018, Casper topped $400 million in annual revenue, the company says. That number is likely to continue growing in 2019, which could also be the first year that Casper reaches profitability, as the costs of growing the startup have reportedly outweighed its increasing revenue streams.
Meanwhile, Casper's success has helped spawn a king-sized list of rivals, like Leesa Sleep and Purple Innovation, as well as fellow direct-to-consumer brands like Tuft & Needle and Eight Sleep.
Read more about the rise of Casper here: cnb.cx/2IhtWWm
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How Casper’s founders went from $100,000 in debt to building a billion-dollar mattress start-up - บันเทิง
How is this unique? Purchased a memory foam mattress online from Costco 10 years ago and it shipped exactly the same way
Lmao
well costco isnt as good as marketing their online mattress stores
this is an informercial
Marketing is everything
😂😂😂
Celebrity endorsement is the difference.
They just explained us how to properly market a product trough influencers
Well duh read the title of the video
Very profitable business, bunch of foam cost very little, end product is x100 of the cost
What about the engineering and manufacturing of the tooling, the warehousing, logistics, marketing, etc.?
Same with your phone
qyahb is it a better bed in terms of quality tho. Bad bads can hurt ur back and not be good for your body at all. I have a seally mattress. I wonder if in terms of quality and comfort that casper is better
@@user-he7sc3fg3r I went into slumberland looking for a bed the other month. I laid on the sealy bed and I was amazed at how comfortable it was. I saw it was only $800 and was ready to buy it that day. But then they told me that $800 was only for the frame and the mattress was $2500 :( Maybe Ill talk myself into getting it but idk
every product that is profitable has a low cost. but to do 10000000 item at the same quality, it requires consistency. to deliver your products to customers on time requires consistency. consistency is what costs money.
They probably spend millions a year in advertising.
StJimmy546 I’m talking about over advertising and flooding their ad.
Back when they first started, you could not listen to a podcast without hearing one of their ads.
Yes they do, the paid Kardashian promotion he talks about in the video costs $250K minimum just for an instagram plug.
Genius
who else thought the biggest investor was adam levine when it was showed at 2:33
In alternate universe where the allied loses he does....
meeeee
I went with a competitor mattress-in-a-box because they were Canadian but I love the concept and my Endy. It was way easier to transport this type of box to a new apartment compared to a traditional box/spring set up.
😮
Great Case Study. Keep making videos like this.
Well known in Europe. Multiple startups like this actually.
they thought selling a mattress online a good startup idea, now i am crying in pain for all that REAL good startups ideas I had before .
This is more innovative than you think
Most of the money old matress stores spent went into fancy showrooms and salespeople.
Cutting those out makes things much much cheaper. To the point where shipping is by far thoer largest expense. But before Casper and the like took off the common logic is that no one would buy a mattress without trying it first. but apparently people do.
Flak153 it has more to do with the power of “influence” if a well loved celebrity endorsed any product, either the company behind the product is legit and actually good or they have enough money to pay the price to get such influencer (which they wouldn’t have if they sucked soooo it turns into “they must be good”) as far as the public is concerned, they give the benefit of the doubt if a loved celebrity talks about it. That’s enough to jump start any business
“The Nike of sleep...” lol that’s a good one!
So how good is the actual mattress? My bed is from IKEA and that mattress was picked out for my back, sleeping habits etc. They didn't talk about the quality at all, isn't important for them remaining popular?
And this advertisement will break their website again
It's not just a youth or TH-cam matress. When my state shut down due to Covid, the regular matress stores weren't 'essential'. The only place to get a matress was either Walmart or an online seller. I bought a Casper matress, and lucked out with a very comfy matress, but it wasn't my first choice.
I just bought a $100 memory foam queen mattress from Walmart, got it in 2 days and came in a tiny box. I love the future
Everyones loves a good mattress!
Cant literally hear anything he says background is too loud
I bought a mattress last year. Started to go with memory foam but decided on latex from Sleep On Latex last minute. Best decision I ever made.
This video is making me sleepy just by watching it
Watch a purple ad before watching about casper lol
never even heard of it
Sustainable growth? This is a sugar high
Is it really comfortable tho for those who have it?
Brilliant! Just brilliant!
The middle foam layers cause respiratory problems
Hey! Would love to know more about this.
What materials are they?;
Damn! Now i want one
I should be sleeping now, but I am watching this video
Very Interesting
I got a add that was a matters name pluffy or pluff matters
Love to see new success entrepreneur
I Made Suparta why ?
Great idea . Nice fit . 💯
So where is there more money? In being the company that pays for celebrity endorsements? Or the celebrities that invest?
Video about Casper:
Ad about another mattress company: Free propriety😏
*Good to see business innovation* that paid off.
All their podcast ads and YTube reviews made it possible !
Who else heard their ads on a podcast ?
This aged wonderfully…
Make mattresses great again
*_Casper, the friendly foam_*
im watching this laying down on my casper that's crazy
How much is it?
@@leilanidru7506 300$ to 1499$ depends on ur comfort level
Amazing
Haha it’s funny cause I’m watching this at 2am LOOL
laughing out overly loud
I got a puffy mattress ad before this.....
So is the mattress any good?
Heyy, i see the wolf of wallstreet
They have raised their prices substantially in the past few years.the same mattress price going from $900 to $1200 in two years isn't insignificant. And that is just for a basic full mattress alone. prepare to pay another $500 for the base or what used to be called the boxspring.
So expect to pay around $2000 plus another $180 for sales tax
Why am I watching this on my bed ?
Wow !
Nobody give props but i do because they’re clever Inventors who successfully marketed a really comfortable product
Very nice. I like Business...and it's good to know....
Rated with 1 star
George of Melbourne Beach, FL
Verified Reviewer
Original review: Jan. 6, 2020
A few months after purchasing a Casper Mattress and their protective mattress cover, I began to notice that the ends or corners were curling upwards. Their support asked if I was following washing instructions and I was. Thereafter, a new mattress cover was sent to me. The problem persisted and I was told next that the actual bed cover (not the mattress cover sold separately) likely needed to be replaced. I replaced the cover with a new one they sent and the problem continue
I honestly can not understand how they are valued at $1B??? It is a one product online company... selling mattresses.
What are their assets? Patents? Inventory? Machinery?
Feels very unreal to me - a lot of hype and speculation created that value... no market barriers for other companies no IP... this will resolve into hot air...
Sales. In the third full year, they did more than $600m in revenue.
And I wouldn't quite call them a one product online company anymore either. But in many ways, they are the iPhone of the bed industry. It's just way simpler, less hassle, less worries.
I would also assume that their R&D is going through a lot of possibilities as well.
@@norddalle6408 they don't make any profit. Their profit is negative
Kevin Chan what do you mean they make no profit ?
@@Guchinagi yes they have revenue but their cost is greater then their revenue. They have no cash or profit, hence the IPO
@@kevin1994chan doesn't really matter. The company is still very young. If it's not profitable in 5 years it's a problem, but it's not a problem as of yet.
Sleeping on purple is like sleeping on Dr Scholls Foot Inserts
I won't take it return it back to Casper baby
Got a leessa advert on this vid
GREAT
Cool
I helped this company lol n never had one I post it cus at work everyone was getting one
this sounds like an ad..
Frankly, these videos are inspiring..
Can someone feedback on how this Casper performs after 4,5 years?
Still losing money year by year
What's the value now
So it is not about the product, it is about marketing.
There was a similar business in shark tank
So, what's this? Just a "hyped up" ordinary foam mattress
I think it's the factor of accessibility too
idk I kinda like it I tried it at one of their stores. way different than other foam mattresses I've been on.
3:34 CAN SOMEONE PLEASE TELL ME WHAT THAT LIGHT IS CALLED OR A LINK?
It's called "The Glow Light". You can find it here on Casper's website: casper.com/glow-light/
hova pfft $129 for a lamp
@@moh5938 same
I use a sleep lamp, cost me about $20 on Amazon. There are thousands of lamps that do exactly what this Casper lamp does.
cool
Well a mattress isn't really something you should skimp on, people often overlook this.
Thought it was lull?
Casper is the American version of Koala mattress company
Ummm why is Kylie on the thumbnail ?
Cause she unboxed a Casper mattress in her Insta and their site crashed after that
Purple is better their bed are amazing
I love Casper and the next mattress I get will be one. Once I buy one, it's guaranteed my parents will buy two more.
99 Insomniacs, hated this video.
Lmao this aged well
Amazing, this old technology and marketing got 1 billion in the US.
Mattresses are beeing sold on internet in the EU sind early 2000.
The youth is beeing influenced way to easy, what happened to their education / parenting? (Kylie Jenner for f.. sake)
way too firm for me
Actually it's worth $100 million now based on the stock market.
50 million today
Sorry mate, bambillo is the Nike of sleep.
Team of 5? My god each person must be so diluted in terms of equity.
2:35
the mattresses look super cheap and uncomfortable
Looks pretty low tech to me, no way is worth $1billion company unless the initial investors are planning to dig a big hole for the future investors
as long as the profit is enough to maintain the valuation.
Now a days it seems like everybody is valued at 1 billion. Oh you built a lemonade stand ! Scouts cookies! 1 billion valuation. It would be nice to know actual profit. I have a feeling it's not much, thats why they have to create the hype.
What is innovative about matress, they just hyped it, their good in mktg it.
You want something actually nice buy a cocomat matress
What's that ?
you have like 10 other brands like casper
Jason Deblou true but none advertise like Casper. if you live in NYC, you see their ads almost in EVERY train cart and since people in NYC (especially on the train) don’t like making eye contact they look at the ads while on the train. casper is everywhere in nyc
Don’t believe the valuation hype! It’s about the net profitability people! Note: the valuation source is Casper themselves!😂 Look I wish them all the best and success but enough with the “billion dollar companies”, when it’s just valuation!
when a company valuation become 1 billion dollar
You were right. Even with the "billion dollar valuation" they are still losing money..
*I hear it breathing*
Why kylie?
@@AzamAlbrahem وصخ 😂👊🏽👊🏽
Because she was paid. The Kardashians charge $250K+ for instagram promotions of a product.
Why are people ok to sleep on synthetic materials and toxic fire retardants? There are healthy alternatives to spend a third of your life on! Wool mattresses are an amazing option that has transformed my life!
When are they gonna IPO? Also I'm all for a healthy dose of skepticism however, I earned a long time ago that any investor that that rejects an idead and uses the words "never" or "no one" or "impossible" isn't worth doing business with anyways. Too many companies have proven those with that mentality wrong e.g. Tesla, Casper, Netflix, Apple, the list is endless. Pretty much any technology that has revolutionized/disrupted entire industries dating all the way back to the light bulb involves stories of cynics/doubters speaking in definitive terms and they were all proven wrong.
There’s an name for this effect and it isn’t coming to mind rn but if I remember it I’ll edit it to this post. It basically goes like people look at exceptions to the rule and try to make it the rule itself. Like propping up the thousands of successfully startups but the millions that may fail that no one ever talks about. Of course your gonna have those who had a dumb idea and still made something out of it but it isn’t being a bad investor to think logically or rely more on numbers and practicality more than faith and blind intuition. Yes, MANY companies have proven those who doubted them and shut them down wrong, that doesn’t mean those aren’t the exceptions. For example, just because bill gates and mark zuckerberg dropped out of college does that mean in every new startup, being this genius college dropout is a key indicator? No. If something sounds like a dumb idea, with no chance of turning a profit and no organized team, ideas, vision etc use your head and pull out. Yes there are people like amazon who didn’t make profit for years on years but manage to grow exponentially, but again, exception to the rule. So just because there are companies who proved naysayers wrong are great but we never hear about the millions more in the background who failed. And of course different investors and willing to accept different levels of risk in a new start-up. Sometimes, it’ isn’t the company or even the investor fault, the company just needs to find the right type of investor interested.
next up, people buy a car online without actually test driving it!
This has been happening for ages.
People do this with Carvana
Tesla, Genesis.. lol
It's already been done. Look up Carvana. Stuff like this is the trend now.
1000 dollars for a mattress no thank you
1/3 of your life isn't worth your silly 1k bucks?
A mattress is one of those things you only buy as often as you move out to a new house/place. The point is not the price but if it is worth it. For me, my health is totally worth it; the best investment you can make for yourself.
@Rex Limiron That's besides the point lol. The point is that he's not willing to spent 1k for a mattress lol. Doesn't have to be this mattress
A&L Strarup silly 1K? Is that a joke?
Rex Limiron they make it sound like you have to break the bank or your spine will collapse if you don’t buy something that’s obscenely overpriced. No ones saying go buy a $50 piece of crap but there’s a lot of middle ground and other options both in price and comfortability that don’t include breaking your back or bank account. Foh
I bought a matress online from amazon nearly a decade ago. it's not innovative or new, they simply got lucky that cool celebs mentioned them.And you could literally sell a piece of shit as long as celebs say it's cool it will sell out.
I thought Casper is a ghost?
Pretty dumb how they make it sound like better sleep was a niche trend. Everyone wants a large comfy bed. Don’t try so hard lol
Investors are daft
Only if they aren't able to get to an IPO and cash out.
their mattresses are overpriced garbage tho.
Seems like nothing special just an ordinary foam mattress
nike of sleep when Reebok is the best
*IKEA matress 3 times better and lasts you 20 times longer.*
Who's here from Patriot Act? Hasan if you're reading this give me a job already.
Lol the business is putting a mattress in a box for dumb people to buy LOL genius
You mean foam instead of mattress lool
Why the f is Jenner on the thumbnail. Wtf
Poly foam. Plastic. Amazing what marketing can do for a mattress company lol