BusinessTwo Years Post-IPO, Casper Returns to Private OwnershipCasper has struck a deal with private equity firm Durational Capital Management to go private

By Tim Nelson

November 18, 2021

• Facebook
• Twitter
• Email

A Casper store on Santana Row in San Jose, California.Photo: Getty Images

• Facebook
• Twitter
• Email

The past 18 months have changed the landscape for buying furniture and design in once-unthinkable ways. The success of e-commerce platforms like 1stDibs suggest that consumers have more of an appetite for buying high-end items online than they once did, and a number of businesses were able to ride pandemic-induced shifts to retail success.

Those changes also extend to other areas of the market, including brands born from the direct-to-consumer boom of the 2010s: Less than two years after going public in February 2020, Casper Sleep is going private once again, as reported by the Wall Street Journal. (That said, recently so-called pandemic-market darlings have seen their stock prices tumble.) 

This week, the company struck a deal with private equity firm Durational Capital Management—known for investing in food businesses including Bojangles—to go private. The acquisition was executed at $6.90 a share, valuing Casper Sleep at under $300 million.

Launched in 2014, Casper drew inspiration from the success of Warby Parker to shift how mattresses were bought and sold. The ascent of their brand proved that (at least some) consumers were willing to have a mattress they’d never laid on shipped in a box to their door. Investment from Target suggested that the company was on a path toward long-term viability.

Become an AD PRO Member

Buy now for unlimited access and all of the benefits that only members get to experience.

Arrow

But, over time, the market became saturated: Purple, Nectar, Avocado, and others have entered the mattress-in-a-box space over the past half decade, as have more traditional brands like Serta Simmons Bedding and Tempur Sealy International. Some of these competitors were able to undercut Casper on price, while the increasingly crowded landscape drove up online advertising costs—which encouraged Casper to launch its own brick-and-mortar locations.

Subsequently, profitability has remained stubbornly elusive. Losses for the first three quarters of 2021 totaled $80 million, up from a $75 million loss over the same period a year prior—despite a sizable jump in mattress demand since the beginning of the pandemic. Regardless of rising sales, the company has faced consecutive quarterly net losses dating back to 2018. In conjunction with the deal, Casper cofounder Philip Krim will leave his post as company CEO. The terms of the deal must be ratified by a majority of Casper’s shareholders.