Casper lowers IPO price range, implying valuation of just over $500M
marketwatch.com
marketwatch.com
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?
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https://www.forbes.com/sites/laurendebter/2020/02/05/casper-...
Well I guess some of the private investors are taking a bath as well...
Without expensive marketing campaigns, word of mouth competitors on Amazon can sell the same item for 1/3 of the price, shipped.
Casper prides itself on sourcing foam from the US, but foreign manufacturers are making the exact same foam in the exact same densities
The composition of their mattress is not a secret: https://www.sleeplikethedead.com/mattress-reviews-casper.htm...
They claim the combination of different foams as differentiation, which is utterly ridiculous because anyone can copy them, none of the densities they use are unique.
All the interesting patents in foam and gel are already owned by bigger players (like Serta Simmons... which sued Casper...)
I just looked up their price for a queen-size foam mattress. SIX HUNDRED DOLLARS? SIX HUNDRED DOLLARS!
WTF. It's just a hunk of foam.
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.
Going to a website to check pricing is more effort than the other two options you stated?
This is a commodity product that has numerous alternative vendors with brick and mortar stores. So not only will customers choose partially on price, but I'd think they'd prefer to buy something they can actually test out first. Giving customers a 100-day return policy isn't a solution, as it requires the customer to make the purchase and then deal with the hassle of a return.
It's not unreasonable for a little-known startup to display a "starting at $X" to at least give some idea of what price point they're competing in.
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
https://www.ridehome.info/the-curious-case-of-casper-with-da...
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."
It is a short article, and there are probably slightly better ones out there, but all of the important information is in this article: the current range and valuation, the prior range and valuation, and the valuation at the last funding round. This tells you a lot.
People post things from Twitter all the time that have even less.
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.