In a city as vibrant as NYC, we almost never get our recommended 8 hours of sleep for one reason or another and we often suffer the consequences. If you want to be operating at optimal level without the bags under your eyes and need a tech-enabled solution to fix your sleeping issues, Eight Sleep is the solution for you. The company has pioneered the smart-mattress that tracks your sleep data, allows you to set the temperature for your bed, and it even wakes you up. It’s all controlled with your smartphone, which you are cuddling up with any way (let’s be honest) and the mattress can be integrated with other connected devices around your home. Their next generation mattress gives you what you need to manage your sleep in a seamless fashion. It just can’t force you to decline those late night drinks or that fabulous cocktail party that you’ve just been invited to.
AlleyWatch chatted with CEO Matteo Franceschetti about the startup, the future of sleep, and their most recent round of funding.
Who were your investors and how much did you raise?
We raised a Series A of $5M. Our investors include Yunqi Partners, Azure Capital, Comcast Ventures, Y Combinator, Stanford StartX Fund, and Sinovation Ventures.
Tell us about your product or service.
Eight offers innovative products for better sleep. Our mission is to make people’s sleep count for more, using technology, detailed design, and proven science and data to personalize and improve each night for every body.
What inspired you to start the company?
Like millions of other men and women, I was restless. I researched and tried products like fitness trackers and sleep tracking apps, but none of them answered my questions about sleep. Shopping for solutions was a mess, so I thought: why are beds so behind when everything else in our world is so modernized? I realized the need to bring true innovation to sleep.
How is it different?
We design products by leveraging sleep data. And all our products are designed to integrate seamlessly into people’s lives – no need to wear them or adapt your lifestyle to them.
What market you are targeting and how big is it?
The U.S. sleep aid market will reach $80.4 billion by 2020, while the mattress market is set to reach $24.6 billion this year.
What’s your business model?
Currently we sell direct to consumer (online) and on Amazon.
How do you think about user acquisition in your industry when customers are not purchasing that frequently?
The current LTV of our customers is lower than where we’d like it to be because we are offering just two products. However, as we scale our product lines that will change. People, on average, buy just one mattress every 5-10 years, but they buy many other ancillary products to help them sleep well.
What was the funding process like?
We already had investors from our seed round, so they were the first we invited to participate in our round and we were happy to have many of them on board. They also facilitated introductions to new investors. We are lucky to work with investors who support us and believe in our mission.
What are the biggest challenges that you faced while raising capital?
There are not many investors who fund hardware companies. So fundraising for us is more challenging than software or e-commerce first companies.
What factors about your business led your investors to write the check?
The power of our technology, and our approach to innovation in sleep.
What are the milestones you plan to achieve in the next six months?
Growing sales and launching new products.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Focus on finding product market fit so you can start generating revenue. Nothing else matters until you start generating revenue. Revenue will attract capital.
Where do you see the company going now over the near term?
We will continue to expand our premier line of products to improve people’s sleep. We see the company driving innovation and dictating trends in the sleep industry.
What’s your favorite restaurant in the city?
We are big fans of Marea.