Eight Sleep Raises $86M, Nearing $500M Valuation

AI and Sleep Tech: Eight Sleep Secures $86 Million in Series C Funding

The investment landscape is increasingly recognizing the potential of artificial intelligence to address everyday consumer needs. A recent example of this trend is Eight Sleep, a company specializing in “smart” mattresses and covers.

These products utilize machine learning and AI algorithms to enhance sleep quality through temperature regulation and comprehensive physical parameter monitoring, providing users with valuable insights into their overall health.

Investment Details and Key Backers

Eight Sleep has successfully closed a $86 million Series C funding round, led by Valor Equity Partners.

Notable participants in this round include SoftBank, Khosla Ventures, Founders Fund, and General Catalyst. Furthermore, several prominent individuals—including athletes Alex Rodriguez, Kris Bryant, and J.D. Martinez, entertainer Kevin Hart, and tech innovators Sophia Amoruso, Naval Ravikant, and Kyle Vogt—have also invested, demonstrating their personal use and belief in the product.

This latest funding brings the total capital raised by Eight Sleep to $150 million, with the company’s valuation now approaching $500 million.

Future Plans and Technological Advancements

According to Matteo Franceschetti, CEO of Eight Sleep, the new funding will primarily support further technological development.

Currently, the company’s Pod technology monitors temperature, heart rate, and breathing patterns to dynamically adjust bed temperature. Future innovations may encompass additional physical products, ambient factor control like lighting, and expanded diagnostic capabilities for sleep analysis.

Global Expansion

Eight Sleep also intends to expand its market reach internationally, with plans to launch its products in Europe and the U.K. before the year’s end.

The company recognizes that the need for improved sleep extends beyond the United States.

The Genesis of Eight Sleep

Franceschetti, who co-founded the company alongside Massimo Andreasi Bassi, Andrea Ballarini, and Alexandra Zatarain, explained that the concept originated from his personal experience as an avid athlete.

“I viewed sleep as a crucial component of recovery,” he stated, coining the term “sleep fitness.” He emphasized that sleep is not merely unproductive downtime, but a vital element of well-being for everyone, not just athletes.

A Vision for Optimized Sleep

“Our goal is to optimize sleep and extend lifespan,” Franceschetti articulated. He believes that six hours of quality sleep can be more beneficial than eight hours of restless sleep.

The company’s original name, Eight, alluded to the commonly cited eight-hour sleep recommendation. Eight Sleep asserts that its products enable users to fall asleep 40% faster, increase deep sleep by up to 20%, reduce mid-night awakenings by 30%, and minimize tossing and turning by as much as 30%.

The Rise of Quantified Self Technology

While Eight Sleep has gained significant traction within the athletic community—currently serving over 100 professional athletes—the company anticipates broader appeal driven by the growing popularity of quantified self technology.

This includes hardware and software designed to track metrics such as blood pressure, heart rate, sleep duration, activity levels, and more.

A Broader Trend in Sleep Tech

The increasing sophistication of computing and communication technologies, coupled with advancements in cloud computing and big data analytics, has fueled the expansion of data-driven health and wellness solutions.

Sleep has emerged as a significant area of opportunity for both startups and established tech companies. For instance, Oura recently secured $100 million in funding for its sleep and fitness tracking rings, while Zeit is exploring wearable technology to address sleep disorders.

Competition and Market Potential

Major tech companies are also actively involved in the sleep tech space. Google has updated its Nest Hub with sleep tracking capabilities, and Apple acquired Beddit, a sleep tech company, in 2017.

However, updates to the Beddit hardware have been infrequent, potentially indicating Apple’s focus on integrating the technology into its broader health initiatives.

The global sleep tech market is currently estimated at around $30 billion, and Eight Sleep is experiencing substantial growth. The company’s revenue for 2021 is projected to triple compared to 2020, driven by its mattress (priced around $3,000 for a queen size) and smart cover (starting at $1,720).

Industry Perspectives

“The sleep tech market is still in its early stages, offering immense potential given that we spend approximately one-third of our lives asleep,” stated Antonio Gracias of Valor Equity.

“Consumers are increasingly recognizing the importance of sleep fitness for overall health.” Gracias, who is joining the board, added that his personal experience with the Pod solidified his confidence in the company’s potential, noting its disruptive technology and rapid innovation.