The Kolmogorov IPO Score for Casper Sleep Inc.

Our initial success prediction for Casper's IPO!

Casper Sleep Inc recently filled for an IPO and the company highlighted technology as being one of its advantages:

‘‘As a pioneer of the Sleep Economy, we bring the benefits of cutting-edge technology, data, and insights directly to consumers. We focus on building direct relationships with consumers, providing a human experience, and making shopping for sleep joyful. We meet consumers wherever they are, online and in person, providing a fun and engaging experience, while reducing the hassles associated with traditional purchases. We are building a universal, enduring brand that is already embraced by over 1.4 million happy customers.

We do all of this because we understand the consumer. Shopping for sleep is a highly considered and personal decision. Today's consumers research their purchases and move freely back and forth from online to offline. At Casper, we put the consumer first in everything we do and invest to ensure long-term valuable relationships where consumers return again and again to shop for more sleep products and services.

 Product innovation and excellence lie at the heart of our business. Since the release of our first product, the award-winning Casper mattress, we have expanded into pillows, sheets, duvets, bedroom furniture, sleep accessories, sleep technology, and sleep services. We design and engineer our products in-house at Casper Labs. We believe this state-of-the-art research and development facility puts Casper on the cutting edge of sleep innovations. We employ a team of data-driven researchers, designers, and engineers focused on building a better night's sleep through innovative new products such as our Wave mattress with hyper-targeted support technology and the revolutionary Glow Light, which is designed to synchronize with the body's circadian rhythm and was named one of Time Magazine's Best Inventions of 2019. We believe that no other company catering to the Sleep Economy has our level of product development talent, resources, data-driven insights, or expertise.’’

Extracts from the S-1 filling

What do our tech investor sentiment signals tell us?

Casper is not part of our pre-selection list of 246 technology-driven unicorns that we’re closely monitoring. However, we decided to take on the challenge of applying the investor sentiment analysis to stress-test our mathematical models against companies where we have limited profiling data such as with Casper – just like we’ve done for One Medical previously.

As a reminder, we theorize that the Kolmogorov IPO Score (see our intro post) is a proxy answer to the chances of an IPO succeeding i.e. the Kolmogorov IPO Score corresponds to the probability of an IPO being successful! It is also worth mentioning that our success prediction analysis for Casper is based on the following assumptions:

50/50 investor profile - we set the composition of the K > 1 investors to be a 50/50 split between growth investors & value investors i.e. 50% are of a growth investor profile type and 50% are a value investor type of profile. Also, since Casper is going to be listed on NYSE, we factored certain NYSE specific signals.

The Kolmogorov IPO Score for Casper as of today (Jan 20 2020) based on signals gathered over the past few days is 13%. So according to our prediction, Casper has a 13% probability of success and thus its IPO appears to, unfortunately, be heading for failure if the prediction based on current signals is correct!

Of course, it is possible this prediction will change to a more positive outlook as we capture more data over the coming days and weeks. It is also possible that under one particular type of investor profile, the company may score higher or lower - subscribers to any of the plans of our Pre-IPO Analyzer Service will get prediction updates for Casper on a regular basis.

Finally, please recall that we don’t consider first-day stock surge as 'success’ - instead, the ability of the company to maintain a strong stock performance till the lockup period expires is what we consider as being a successful IPO from the perspective of existing shareholders like VCs. This is very important as we have seen companies make stellar debuts, with their stocks skyrocketing on the first day of trading, only to see a couple of weeks later the stocks sinking to a record low just before the lockup period expires!

Do you also know that you could commission bespoke Pre-IPO analysis from our team on pretty much any VC-backed tech company in Europe and the US?

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Likewise, if you are an LP and would like to find out how our platform can help you source and analyse VC funds, please feel free to reach out to our team.


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Disclaimer: Any opinions, newsletters, research, analyses, prices, projections or other information offered by Kähler VC.X is provided as general market commentary, and does not constitute investment advice. Kähler AI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.  ZAIKU GROUP LTD (Parent company of Kähler AI).