Target Invests $75M in Mattress Startup Casper

The retailer reportedly had sought deal to acquire Casper outright 

Author: Rimma Kats

May 25, 2017

Big brick-and-mortar retailers are moving quickly to acquire emerging ecommerce platforms, picking up digital know-how, rapidly growing revenues and often a bit of cachet to boot.

In the latest move, Target is said to be is investing roughly $75 million in online mattress startup Casper, whose “bed-in-a-box” strategy is tailored to millennial tastes. The news was initially reported by Recode, which earlier had reported that Target had been in talks to buy all of Casper for $1 billion.

“With its partial acquisition of Casper, which followed partnerships with Bevel and Harry’s, Target is targeting younger consumers who have flocked online in recent years,” said eMarketer analyst Yory Wurmser.

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“The cool factor Target had ten years ago is today captured by these niche brands, and Target is hoping to capture some of their luster with these investments and partnerships,” he added.

Walmart too has been snapping up ecommerce properties large and small, including purchases of quirky brands that resonate with younger audiences, such as fashion brand Modcloth and camping and fitness site Moosejaw.

“Walmart correctly came to the conclusion that their brand had no cachet with young, wealthier consumers, and nothing they could do would change that,” said Wurmser. “So they’re buying properties that have that cachet and letting them retain their brand identity. That way, they can start attracting these consumers.”