Casper prices IPO at $12 a share, which is at the low end of estimates

Business

Samurai Messenger Service prepares to deliver a packaged mattress from the bed delivery company Casper in New York.

Yana Paskova | The Washington Post | Getty Images

Casper on Wednesday evening priced its initial public offering at $12 per share.

At this price, the company would have a market value of $476 million, excluding the underwriters’ allotment, the report said.

The online mattress retailer had cut its price range from $17 to $19 a share, to $12 to $13 a share, according to a Wednesday regulatory filing.

Casper plans to list Thursday on the New York Stock Exchange under the symbol “CSPR.”

Casper’s latest round of funding valued the direct-to-consumer business at $1.1 billion. But like many Silicon Valley-backed startups looking to go public, the company has faced scrutiny for its lack of profitability and high costs to acquire new customers, and keep them. Its IPO also comes on the heels of a WeWork IPO fiasco in 2019, which put a dark cloud over the start-up market.

“When Casper’s last [funding] round was done, the mattress category was growing quite nicely,” said Dan McCarthy, an assistant professor of marketing at Emory University’s Goizueta School of Business. “Over the last 12 months, slowness showed up. … I think they are just late to the market.”

In the nine months ended Sept. 30, Casper reported a net loss of $67.3 million and revenue of $312.3 million.

The company launched in 2014 and was one of the pioneers of the mattress-in-a-box trend. It is now expanding into brick-and-mortar locations.

Casper has 60 open retail stores, with goals to have upwards of 200. It has also begun selling bedroom furniture and fixtures, like pillows and lamps, and struck partnerships with retailers like Costco and Amazon. Casper says it is building its business around the global “sleep economy.”

The New York-based company’s investors include retailer Target, actor Leonardo DiCaprio and investment firms Lerer Hippeau Ventures, IVP and NEA.

The mattress retailer was originally planning on raising as much as $182.4 million through its IPO, but it will fall well short of that target. Casper is planning to use the proceeds from the offering for working capital, funding growth and other general corporate purposes, according to regulatory filings.

“Casper is selling a mattress,” McCarthy said. “The longevity of that is terrible. … It’s poor unit economics.”

Some of Casper’s rivals today include Purple, Nectar, Serta Simmons’ Tuft & Needle, Walmart’s Allswell mattress brand and Eight Sleep.

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