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In 2013, David Wolfe spotted a business opportunity. No one likes falling on 30 mattresses in an exhibition hall, he told himself. They just want an affordable and comfortable mattress. Wolfe suspected that if he scrapped the showroom and sold a single model, he could lower the price and sell directly to tired sleepers. So he partnered with Jamie Diamonstein of Paramount Sleep, an 80-year-old family mattress maker. In March 2014, the duo had a prototype for their company and a name: Leesa. To their frustration, they also had a competitor: Casper beat them in the market with the same idea, almost $ 2 million in seed funding and a lot of hype.
What should a mattress seller do?
“We ordered their mattress,” says CEO Wolfe. And he was convinced that his sleeper was superior. “We put theirs in our storage unit and we thought,” Well, it’s not going to be a problem. “” And although the direct selling mattress business has not become more crowded since then, Leesa has come out strong. After launching in early 2015, the self-funded startup was poised to sell more than 30,000 units (priced between $ 525 and $ 990) and generate nearly $ 30 million in sales for the year. “We’ve been profitable since our very first month,” says Wolfe.
He has of course kept an eye on Casper, who counts Leonardo DiCaprio and Adam Levine among his investors. But Wolfe went in a somewhat different direction. Last July, Leesa announced its partnership with the new Denver-based private equity firm TitleCard Capital, which partners with celebrities such as Jimmy Kimmel and New York Rangers goaltender Henrik Lundqvist. Some of these people invest in startups in the TitleCard portfolio, some market them and others do both. Leesa was TitleCard’s first investment: $ 9 million in Series A financing with a post-payment valuation of $ 45 million.
Tyler Tysdal, managing partner of TitleCard, was drawn to Leesa for several reasons: he drew inspiration from Diamonstein’s 20 years of mattress design and Wolfe’s three decades of entrepreneurship. He also liked the fact that Leesa has a charitable element: she donates a mattress to a homeless shelter for every 10 she sells. “This is very significant for the people involved in TitleCard,” says Tysdal. So far, two of the firm’s celebrities – musician Jessie James Decker and New York Jets grand receiver Eric Decker – have agreed to market Leesa’s products, he says. For Wolfe, it is more precious than a celebrity who has just written a check. “They are real partners as opposed to just investors,” he says.
But there is another fact of which he is even more proud: Leesa is profitable, and he has not yet received that $ 9 million. “I am a 53-year-old entrepreneur who has always believed in starting a business with an eye on results and an eye on growth,” he says. Some of these millions will be used for expansion – it opened a branch in the United Kingdom in September and plans to expand to Canada and another region this year – as well as to develop new products. A cushion like this always helps an entrepreneur sleep more deeply.