Casper Sleep has said it expects its initial public offering (IPO) valuation to be well below the $1.1bn (£842m) the online mattress retailer had commanded in a recent funding round.
In a regulatory filing in New York today, Casper said it expects its offering of 9.6 million shares to be priced between $17 and $19 per share.
At the top end of this range, this would mean the IPO raises $182.4m, giving the company a valuation of $768m. Casper had been valued at $1.1bn in a funding round in March 2019.
Launched in 2014, Casper is among the online mattress retailers that have squeezed the traditional industry players by building popularity among urban millennials. Its investors include Leonardo DiCaprio and 50 Cent.
The company’s listing will be seen as a test of investor appetite for loss-making companies with lofty valuations, which have been largely been shunned by Wall Street following Wework’s abortive attempt to list in New York last year.
Wework had received a valuation of $47bn ahead of its IPO attempt, but estimated valuations had fallen as low as between $10bn and $12bn by the time the listing was scrapped. Investor Softbank later took control of the company with a $9.5bn rescue package.
Led by co-founder Philip Krim, Casper initially made its name selling one type of “universally comfortable” memory foam mattress, but now sells three different designs.
Casper brought in revenue of $312.3m for the nine months to 30 September, a 20 per cent increase on the previous year. The company also posted a higher net loss of $67.3m.
Shares in UK-based online mattress retailer Eve Sleep shares fell as much as 4.22 per cent following the news.
The company called off merger talks with rival Simba Sleep in September to instead focus on its own recovery.
Eve, which had overhauled its management team in March, said it had “decided that now is not the right time to pursue the potential merger and that it is more appropriate to focus on the Eve rebuild plan.”