Does it seem far-fetched that mattresses could become a social media phenomenon? That’s exactly what happened soon after Casper launched as an online mattress startup in 2014. Although the co-founders initially struggled to convince investors that their business idea would succeed, they were undeterred. So they spent their own money and racked up credit card debt to bring their direct-to-consumer bed-in-a-box vision to life.
When Kylie Jenner posted a photo of her box from Casper on Instagram in March 2015, the company took off into the stratosphere. Other Instagram and YouTube influencers followed in Kylie’s footsteps, sharing their Casper unboxing videos, further solidifying the company’s massive disruption to the mattress industry, making it “the Internet’s favorite mattress” in a matter of months.
Want to learn more about the Casper brand origin story? In this case study, we’ll take a deep dive into the brand, its founders, and how the company experienced unprecedented growth in a competitive mattress marketplace. We’ll also explore what you can learn from the Casper brand story to apply to your own entrepreneurial endeavors.
Plus, find out how to grow your own million dollar brand… absolutely FREE.
|Philip Krim, Neil Parikh, T. Luke Sherwin, Jeff Chapin, and Gabriel Flateman
|Direct-to-Consumer Online Mattress Company
What is Casper?
Casper is an online mattress startup that gained a massive following due to its direct-to-consumer business model, innovative mattress design, and loyal social media following. The company’s mattresses feature a combination of foam layers, including memory and latex foam, and zoned support systems to create a balance of pressure relief and targeted support for different areas of the body.
In addition to its line of mattresses, Casper’s product line includes sleep-related products like pillows, sheets, bed frames, and even a dog bed. The company creates a holistic sleep experience through high-quality products catering to individual sleep needs and preferences. Casper has branded itself as “The Sleep Company" and promotes the message that “improving the way the world sleeps also means improving our communities and our impact on the planet.”
Casper spun the idea of mattress-buying into creating the foundation for a great life, which became a compelling brand differentiator.
Who founded Casper?
Launched in April 2014, Casper’s founders include Philip Krim, Neil Parikh, T. Luke Sherwin, Jeff Chapin, and Gabriel Flateman.
What is Casper's origin story?
The Casper origin story began when co-founder Philip Krim was a college student at the University of Texas, where he taught himself HTML and built e-commerce websites for his summer job. The sites Philip built included window blinds, online poker software, and mattresses.
He noticed the biggest names in mattresses, like Tempur-Pedic, weren’t doing business online. So Philip partnered with Jeff Chapin, who had worked with big mattress brands at a design firm, to create a plan selling memory foam mattresses in a box online, using a direct-to-consumer model. They envisioned becoming the “Warby Parker of mattresses.”
After meeting in a New York City venture accelerator program, Neil Parikh, Luke Sherwin, and Gabe Flateman joined Philip and Jeff as co-founders. The team tested hundreds of mattress types, eventually combining memory foam and latex to achieve the ultimate mattress.
A Bed in a Box
Luke and Neil developed Casper's bed-in-a-box concept that could be delivered via UPS and easily fit into customers' homes. They sweetened the deal with a 100-day trial period where customers could try the mattress, and Casper would pick it up for free if they weren't satisfied. This was a groundbreaking approach during a time when most brick-and-mortar mattress stores required a hefty restocking fee.
After maxing out their credit cards with $50,000 to $100,000 of debt, Casper’s five co-founders put up their own money to support their vision. They eventually found a venture capital firm willing to give them $1.85 million to launch the company in April 2014. The first day the Casper website was live, it sold out its inventory of 40 mattresses, and the five founders packaged up the mattresses themselves on the street in Manhattan.
While the team planned to sell $1.8 million worth of mattresses in the company's first year, they sold that amount in two months. Casper's rapid success right out of the gate attracted new investors ready to buy into their vision. In the early days, Casper's goal was to disrupt the mattress industry. But the dream soon morphed into inventing an industry around sleep.
“Whole foods helped shape the healthy-food movement. We want to do the same for sleep,” said Neil.
How was Casper funded?
After draining their self-funding options and maxing out their personal credit, the Casper co-founders sought funding through a combination of sources. Casper’s funding since its inception has included:
- $240 million in equity funding from celebrity investors, including Leonardo DiCaprio and 50 Cent, and institutional investors like Lerer Hippeau
- $100 million Series D investment from Target, NEA, IVP, and Norwest Venture Partners
What made Casper grow?
Casper’s growth can be chalked up to several factors, including its direct-to-consumer model and the way Instagram and YouTube influencers fell in love with the brand when it was still new. The mattress startup also had an effective marketing strategy that connected with its target audience. Rather than just selling a mattress, they sold a sleep experience that created the foundation for a great life. Who doesn’t want a great life (and a better night’s sleep)?
Other factors contributing to Casper’s rapid growth following its 2014 launch include:
- 100-night risk-free trial
- Unique delivery method (in a box!)
- Celebrity investors like Ashton Kutcher, Adam Levine, Leonardo DiCaprio, and 50 Cent
- Personalized customer service
Casper’s business model and strategies for growth were so effective that the company spawned more than 100 copycat mattress startups.
What is Casper's valuation?
Casper achieved a peak valuation of $1.1 billion in 2019, but a lackluster IPO right before the COVID-19 pandemic in 2020 and subsequent profitability struggles significantly decreased its valuation. Durational Capital Management completed an all-cash acquisition of Casper in January 2022 in a deal valuing the company at an estimated $286 million, which is the last reported valuation for the company.
What lessons can entrepreneurs learn from the Casper brand story?
The Casper brand story offers several valuable lessons for entrepreneurs. Here are some key takeaways:
- Identify a Pain Point: Casper recognized a common pain point in the mattress industry—buying a mattress was a cumbersome and confusing process. They identified an opportunity to simplify the experience and make it more customer-centric.
- Focus on Customer Experience: Casper put a strong emphasis on creating a positive customer experience. They developed a direct-to-consumer model, eliminating the need for middlemen, and offered a generous trial period and hassle-free returns. By prioritizing customer satisfaction, they built a loyal customer base.
- Disrupt Traditional Industries: Casper disrupted the traditional mattress industry by challenging the established brick-and-mortar business model. They bypassed the traditional retail distribution channels and leveraged e-commerce to reach customers directly. Entrepreneurs can learn the value of questioning industry norms and finding innovative ways to provide better solutions.
- Leverage the Power of Social Media: A turning point in Casper’s growth was the moment Kylie Jenner posted on Instagram to share her excitement about opening a new Casper mattress box. Other influencers followed suit with creative unboxing videos and reviews. As a result, the popularity of the brand soared. Connecting and building relationships with social media influencers is an effective way to get more eyes on your brand.
What are the different types of Casper mattresses?
Casper offers the following mattress models:
A mattress quiz on the Casper website helps customers find the mattress that’s a perfect match for their needs and budget.
How much does a Casper mattress cost?
Does a Casper mattress come with a warranty?
Casper offers a 10-year limited warranty on all mattress products purchased through the Casper website or from a Casper-authorized retailer.
The five co-founders of Casper wanted to disrupt the mattress industry, and they did! Although the startup mattress company no longer has the billion-dollar valuation it once had, it's safe to say the founders achieved wealth that has changed their lives and helped them experience new levels of financial freedom.
Plus, how many people can say Kylie Jenner raved about their product and Leonardo DiCaprio invested in it? Let’s face it, Casper’s founders have earned some bragging rights!
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