In this Salute to American Success, we’re taking a look at Leesa Mattress, a Virginia Beach, Virginia-based online luxury mattress startup. The company, which launched in January, is disrupting the mattress industry and has already raised $9 million from private equity firm TitleCard Capital. Leesa’s CEO David Wolfe said the idea for the company came from a planning meeting he was having with his team.
Leesa, which has no showrooms, ships mattresses in a box directly to customers.
“I thought… there are mattresses sold everywhere and someone’s paying for that real estate,” Wolfe said. “It has to be the consumers, so there has to be a huge advantage to consumers by cutting all that out and going direct.”
Wolfe was able to get the idea put into motion and could even get started with money out of his own pocket.
“I was able to fund [Leesa] out of the profits of my service business,” Wolfe said. “I told my co-founder Jamie Diamonstein that I’d need him to match me as I invest in the business... he was repaid within our first week of business.”
Wolfe added, “The financial capital that went into the business was very low. We were paid back within our first month.”
According to Wolfe, the company has sold more than 8,000 mattresses, and in the last month, grew 23%. Besides selling its products in all 50 states, it just recently expanded across the pond, selling its mattresses in the United Kingdom.
“We’re operating as a $40 million company, that’s our current run rate,” said Wolfe. “We’re doubling in size every couple of months. We got our first sale [in the U.K.] on the first day. It took us three weeks to get our first sale from someone we didn’t know in America.” The Leesa CEO said he expects to see the company reach $30 million in sales this year and do over $100 million next year.
Leesa also was able to raise $9 million from private equity firm TitleCard Capital, which includes celebrities and athletes such as Jimmy Kimmel, Adam Levine, Henrik Lundqvist and Eric Decker.
“In selecting TitleCard, it tells our story of having that value add that we bring portfolio companies and especially to the top line to marketing and sales,” said TitleCard Capital managing partner Tyler Tysdal.
The company currently has 17 employees, with plans to almost double that by the end of the year, according to Wolfe.
Leesa’s products are currently manufactured in Pennsylvania and England, and the company plans to open other plants in Indiana and California, he said.
One market that is still a potential channel for the company is the hotel industry.
“The hotel business is extremely competitive,” Wolfe said. “It needs to be analyzed carefully if we’re going to disrupt that market… it’s going to be a different kind of disruption.”
He added, “We’re very much a part of the new economy. Anyone that’s thriving in the new economy, where they build their business online, is likely to be a target for us.”
Another important theme for the company, Wolfe said, is helping others. It created a social-impact program called “Leesa One-Ten.” Through the program, the company donates one mattress to homeless shelters for every 10 they sell. Recently, Wolfe and his team from Leesa, as well as Tysdal, delivered more than 300 mattresses to the Bowery Mission in New York City.
“We measure our success through our financial bottom line, but also the impact that we have on our community,” Wolfe said. “Right from the beginning I said we’re going to donate one mattress for every ten we sell. We support the Navy SEAL Foundation, and because we’re kind of in the business of dreams when people sleep, I picked the Make-A-Wish Foundation as well.”
Tysdal added, “It’s about having a soul and sharing. What better use for social impact for the Leesa product than to give that gift of home and comfort and sleep to the homeless shelters across the country and potentially internationally?”