Philip Krim’s obsession with a $1 billion valuation for his fledgling mattress company may be about to backfire.
The CEO and co-founder of mattress company Casper Sleep has held off selling the startup numerous times in recent years because he’s been waiting for a $1 billion price tag…
sources told The Post.
Just last year, the money-losing mattress peddler held sales talks with some traditional mattress companies, none of which went anywhere because of Krim’s valuation demands, sources said.
Tempur Sealy, which sells the popular Tempur-Pedic mattresses, and Serta Simmons, a former mattress giant that has been struggling financially in recent years, both looked into buying Casper in 2019 — only to walk away when they learned of the $1 billion price tag, sources said.
“Serta Simmons had no money, and Tempur Sealy had no interest,” one source said.
A Casper spokeswoman denied that the company wooed buyers last year, saying “Casper never pursued a sale in 2019.”
In 2017, tech website Recode reported that Target held “serious acquisition discussions” with Casper — offering as much as $1 billion before deciding to take a minority stake instead.
Venture Capital sources now say one reason those deal talks may have broken down was that Target actually offered closer to $900 million — short of Krim’s $1 billion goal.
“I knew they were going to regret not selling to Target for $900 million, but that was just hubris,” one New York-based VC said.
Based on Casper’s latest fundraising round from February 2019, the privately held NYC-based company is currently worth around $1.1 billion. But there is growing nervousness that the direct-to-consumer sleep company, which filed last week to list its shares on the New York Stock Exchange, could see that valuation deflate like a cheap air mattress if it succeeds in going public.
No doubt, Casper has grown rapidly since its inception in 2014, including doubling revenue between 2016 and 2018. The company expanded its brand largely through high-profile marketing campaigns, including popular subway ads depicting fanciful street scenes and entertaining word puzzles.
But like a lot of startups, Casper loses more money than it makes and is seeking to go public at a time when investors have been turning up their noses at unprofitable startups like Uber, Lyft and office rental company WeWork.
In the first nine months of 2019, Casper lost more than $67 million on sales of $312 million, short of the $556 million in sales it projected it would earn last year.
“At the end of last year, it appeared that things had changed,” explained Matthew Kennedy, a senior IPO market strategist at Renaissance Capital. “But it now seems that there wasn’t an epiphany that you need profits.”
Kennedy believes Casper’s public valuation will…
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