Eight Sleep Hits $300+ Million in Annual Revenue
Eight Sleep is the brainchild of Matteo Franceschetti, Massimo Bassi, and Alexandra Zatarain. Matteo was selling his second company (solar energy) and was looking for an idea. He realized that he spent a third of his life sleeping and it was on a damp piece of foam.
Massimo, Matteo and Alexandra (left to right) the founders of Eight Sleep.
They actually had a really good insight. Sleep is about performance. It’s about doing your best after you’ve recovered. They even started using the term “sleep fitness.”
The first iteration was launched on Indiegogo and focused on a smart mattress that tracked your sleep and could be heated. They sold 5,300 units for $1.2 million.
They applied to Y Combinator, the world’s most popular tech accelerator, and got rejected. Twice. But a partner there focused on hardware asked for them to apply again. They didn’t think it would happen and only spend an hour or two on the application… They got accepted!
They started chatting with customers and they realized that 80-90% of them wanted cooling. So Matteo and the team raised another $8-9 million and started designing a bed cover that could cool.
They teamed up with a firm from China and when things weren’t working Matteo decided to head to the factory. His wife asked him how long he would be gone for. He said until it’s fixed. He returned three months later.
Since 2019 they’ve grown to hundreds of millions in revenue and hundreds of thousands of customers. They’ve also raised over $160 million at a reported valuation of $500 million (in 2021).
Matteo also mentioned in a recent interview that their revenue per employee is higher than Apple.
So here we go!
How much do they make? Well based on this and this they have around 136-148 employees. And Apple generates approximately $2.4 million per employee.
So Eight Sleep’s revenue is around $326 - $355+ million per year. Bonkers.
And with “hundreds of thousands of customers” and a subscription fee of $180 per year, assuming 70% of customers are paying that’s $25 million in recurring revenue (assuming 200k customers).
So what’s next?
Well the most recent pod has a vibrating alarm and senses when you’re snoring so they can elevate your head.
But their recent patents tell you where they’re going. I think Eight Sleep is going for an entire sleep enclosure to control temperature, humidity, position, pressure, noise, scent, light, oxygen level and vibration.
Matteo believes a company that owns sleep will hit a trillion dollar valuation.
What’s that saying… Shoot for the moon. Even if you miss you’ll land among the stars.
There’s money everywhere.
Sources:
Business Ideas of the Week
You could take an element of Eight Sleeps next targets and create a one off solution. A humidifier like device that puts out oxygen. Or a better infuser that generates a scent.
Staying on the sleep theme, the first ever communication between people in dreams happened, has to be a biz play there
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