Target Investing $75M in Mattress Startup Casper

Target has finalized an investment in Casper Sleep, pumping $75 million into the fast-growing mattress startup in a funding round that will total $100 million or more, according to a source familiar with the deal. Existing Casper investors like Lerer Hippeau Ventures, IVP and NEA are also participating in the round. New investors, in addition to Target, could send the round over $100 million. The investment comes after Target and Casper could not come to terms on an outright acquisition after Target offered to buy the startup for $1 billion.

Total Retail's Take: Target appears to be taking a page from Wal-Mart's playbook by targeting digital-first brands that appeal to a younger demographic. In the past year, Wal-Mart has acquired Jet.com, ModCloth, Moosejaw, and ShoeBuy.com. The moves seem to be paying off for Wal-Mart. The retailer announced earlier this month that its e-commerce sales increased 63 percent year-over-year in its first quarter of the 2017 fiscal year. Casper represents a similar type of investment for Target. The online startup gives Target the opportunity to reclaim some of its cool factor while engaging with an audience — young families — that has been increasingly shopping in places other than its brick-and-mortar stores. While unable to complete an acquisition of Casper, Target is moving in the right direction by investing in the popular startup.