In 2013, David Wolfe spotted a business opportunity. Nobody likes flopping down on 30 mattresses in a showroom, he figured. They just want an affordable, comfortable mattress. Wolfe suspected that if he scrapped the showroom and sold a single model, he could lower the price and sell directly to weary sleepers. So he teamed up with Jamie Diamonstein of Paramount Sleep, an 80-year-old family-owned mattress manufacturer. By March of 2014, the duo had a prototype for their business, and a name: Leesa. To their frustration, they also had a competitor: Casper beat them to market with the same idea, nearly $2 million in seed financing and a lot of hype.
What’s a mattress salesman to do?
“We ordered their mattress,” CEO Wolfe says. And he was convinced his sleeper was superior. “We put theirs in our storage unit and thought, ‘Well, that’s not going to be a problem.’” And although the business of direct-sales mattresses has only gotten more crowded since then, Leesa came out strong. After launching in early 2015, the self-funded startup was on track to sell more than 30,000 units (priced between $525 and $990) and generate close to $30 million in sales for the year. “We’ve been profitable since our very first month,” Wolfe says.
He has, of course, kept an eye on Casper, which counts Leonardo DiCaprio and Adam Levine among its investors. But Wolfe went in a somewhat different direction. Last July, Leesa announced its partnership with new Denver-based private equity firm TitleCard Capital, which partners with celebrities such as Jimmy Kimmel and New York Rangers goalie Henrik Lundqvist. Some of these folks invest in TitleCard’s portfolio startups, some market them, and some do both. Leesa was TitleCard’s first investment: $9 million in Series A funding with a post-money valuation of $45 million.
Tyler Tysdal, TitleCard’s managing partner, was drawn to Leesa for a few reasons: He was inspired by Diamonstein’s 20 years designing mattresses and Wolfe’s three decades of entrepreneurship. He also liked that Leesa had a charitable component: It donates one mattress to a homeless shelter for every 10 it sells. “That’s very meaningful to the people involved in TitleCard,” Tysdal says. So far, two of the firm’s celebrities -- musician Jessie James Decker and New York Jets wide receiver Eric Decker -- have agreed to market Leesa’s products, he says. To Wolfe, this is more valuable than a celebrity just writing a check. “They’re true partners as opposed to simply investors,” he says.
But there’s another fact he’s even prouder of: Leesa is profitable, and he hasn’t touched that $9 million yet. “I’m a 53-year-old entrepreneur who’s always believed in building businesses with one eye on the bottom line and one eye on growth,” he says. Some of those millions will be used for expansion -- it opened a U.K.-based arm in September, and has plans to expand to Canada and one other region this year -- as well as to develop new products. A cushion like that always helps an entrepreneur sleep more soundly.