The story of Casper became exciting to us after the S1. Right then, we knew it’d be making the newsletter and got right to work. But so much has happened since then! It’s almost impossible to keep up!

Here are the cliff notes. Embedded within, you’ll find links to the best/most informative/most incendiary content we’ve stumbled across while following this saga.

Context: Casper is inarguably the most recognizable brand in DTC mattresses. It’s also one of the biggest names among 2020’s IPO draft class.

In early January the company decided to go public. It’s unclear whether or not that was part of the original plan. Just a few short years ago, Casper was said to have had deals cooking with Serta, Tempur Sealy, and even Target. None of these deals came to fruition, in part due to the price tag.

Then, the S1 came out, and the response was less than favorable. Casper’s last private valuation was $1.1 billion. That was back in 2017. By December 31, 2018, Casper’s deficit totaled $232.2 million. It has never earned a profit and consistently throughout the S1 warns that that may never happen. 

There’s also a good deal of competition at this stage in the game. In the mattress business, some factories will “design, produce and ship the mattresses directly to consumers for the companies.” These factories tend to share “competitively sensitive information” with similar brands.

To stay ahead of the competition, Casper spent $126 million on sales and marketing in 2018, or 36% of its revenue, down from 42% in 2017.

A few weeks later, the IPO numbers hit newsstands. Casper would debut at $17-19 a share (a $762 million valuation). Still, there were many non-believers like Crain’s New York Business senior finance reporter, Aaron Ellstein. For Ellstein, the Casper saga is eerily reminiscent of, the DTC, pet product supplier which became the poster child of the tech bubble collapse.

As of Wed, February 5, that IPO value dropped twice, once to $705 million and then again to $500 million. The price slashing is due to preliminary 2019 financial results released last week that showed $94 million in losses.

So What?

The ballad of Casper is not unique. Perhaps, right now, it’s just the loudest. From a supply chain perspective, however, it has us thinking a lot about the state of DTC. Here’s what Business Columnist, Mark Ritson has to say in an exceptionally critical Marketing Week article:

For all their trendiness and disruptive rhetoric, most direct-to-consumer brands do nothing new and ultimately rely on traditional marketing and retail channels to scale and grow. (DISCLAIMER: This article has a very hearty paywall in front of it)

The WSJ shared similar sentiments but with less sass, outlining how Casper and other DTCs hoping to scale ultimately resort to the same business practices they’d set out to disrupt.

***UPDATE*** After a promising first day last Thursday (February 6), Casper stock as fallen 32%. The market cap at end of trading yesterday (February 11) was $346 million.