Mattress Firm is no good in the sheets, so Serta got in bed with Tuft & Needle
Serta Simmons Bedding, the mega-mattress makers that have been slingin’ springs since 1870, just bought a 6-year-old bootstrapped mattress startup called Tuft & Needle.
Since direct-to-consumer mattress startups like Tuft & Needle and Casper swiped 20% market share out from under Big Mattress companies while they were sleeping, Serta is looking to even the score.
Not your typical mattress matrimony
Mergers between traditional mattress companies (e.g., Serta and Simmons) are common, but the Serta-Tuft & Needle deal marks the first time old mattress and new mattress have shared a bunk.
Yet, this unusual merger is crucial for both partners. Serta has struggled since sales at partner Mattress Firm have gone dormant, and Tuft & Needle has struggled to challenge younger and better-funded rival Casper (which has 50.4% market share to T&F’s 18.7%).
Tuft & Needle’s founders are on snooze control
Unlike rival Casper (which has raised $239.7m), Tuft & Needle is bootstrapped — meaning the Serta sale (estimated between $200m-$800m) netted the company’s co-founders hundred of millions.
And, there’s another big winner: Casper. After years of fierce competition, the mattress startup landscape is starting to thin out: Purple went public in an acquisition and Tuft & Needle has joined the dark side of the mattress.
With plans to roll out 200 brand-focused retail stores over the next 3 years — and revenue up 50% since last year — Casper seems to have set themselves up for sweet dreams in the $17B mattress industry.