Online mattress retailer Casper Sleep Inc. plans to raise as much as $159 million U.S. in its upcoming initial public offering (IPO).
The New York-based company said in a filing that it plans to sell 8.35 million shares for between $17 and $19 U.S. each. At that range, the company would be valued at just over $744 million U.S. That’s down from a previous assessment of $1.1 billion U.S. for the company.
Casper Sleep, founded in 2014, became one of the leading brands in the so-called "bed-in-a-box" industry thanks to its pioneering status in the niche market. Since then, a slew of competitors has emerged to challenge Casper’s dominance in the sector.
The mattress retailer is selling a story of rapid growth to potential investors. But Wall Street may have lost its tolerance for start-ups that burn through cash since the meltdown of WeWork, which cancelled a planned IPO and saw its valuation fall last year.
Casper must convince the market that it has a clear path to profitability. The company’s backers include Target Corp. (NYSE:TGT) and Canada Goose Holdings Inc. (TSX:GOOS)
Casper, which has 60 stores in the U.S. and Canada, had $312 million U.S. in revenue for the nine months ended in September, a 20% increase over the same period the previous year, according to its filing. Its net loss widened though to $67 million U.S. from $64 million U.S. during the same period in 2018.
Casper has warned that its revenue growth might not keep pace with marketing costs and other operating expenses, including spending to expand internationally. The share sale is being led by Morgan Stanley, Goldman Sachs and Jefferies Financial Group. The company plans to list its shares on the New York Stock Exchange under the symbol "CSPR."
