Mattress-in-a-box company Casper saw its valuation slashed to $476m on Wednesday from the $1.1bn it secured just last year after the group finalised an initial public offering that suffered from lukewarm investor demand.
The company has priced 8.35m shares at $12 apiece, at the low end of a range Casper’s bankers had set earlier on Wednesday and below the $17 to $19 a share price it had sought just over a week ago, according to people briefed on the matter. The company’s shares are set to begin trading on Thursday morning on the New York Stock Exchange under the ticket CSPR.
The deal is the latest litmus test of the market’s appetite to invest in venture backed-companies after a year when several high profile groups suffered disappointing market debuts and one group in particular, WeWork, was forced to abandon its IPO.
The listing from Casper, which has posted $233m in losses since 2017, marks a bruising debut for a company that joined a long list of so-called unicorns — which secured valuations of $1bn or more — just last year in a $100m fundraising that counted venture capital firms New Enterprise Associates and Institutional Venture Partners, as well as the investment arm of retailer Target, as investors.
The IPO comes after investors have complained of scars from several high-profile listings last year that failed to live up to expectations. Shares of ride-hailing companies Uber and Lyft and work chat app Slack remain below the prices that shares were sold to institutional investors in their respective listings.
Casper has attracted celebrity investors including 50 Cent, Leonardo DiCaprio and Kevin Spacey over the years as its valuation climbed. This is one factor that has attracted a group of competitors offering an alternative to the showrooms. There are 175 of these rival startups by one count, with strikingly similar offerings.
Ross Gerber, co-founder and chief executive of Gerber Kawasaki Wealth and Investment Management, said Casper was reflective of other recent lossmaking companies that were tapping public markets that were failing to generate interest.
“We’ve seen this from Silicon Valley for years. This is another example of a company in desperate need of money,” Mr Gerber said.
Morgan Stanley, Goldman Sachs and Jefferies are the lead advisers on the listing.