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The venture world is — quite literally — waking up to the potential of applying artificial intelligence to a wider variety of real-world, consumer-driven problems, and today comes the latest development on that front: Eight Sleep, which makes “smart” mattresses and mattress covers for regular mattresses that use machine learning and other artificial intelligence-based algorithms to improve your sleep both by changing temperature and monitoring other physical parameters to provide an overall picture of your health, has raised $86 million in a Series C round of funding.
Valor Equity Partners — the firm that has backed the likes of Tesla, SpaceX, GoPuff and many other big tech firms — is leading this latest investment, with SoftBank, Khosla Ventures, Founders Fund, and General Catalyst also participating, along with a lot of high-profile individuals who are also users for the product, athletes Alex Rodriguez, Kris Bryant and J.D. Martinez; celebs Kevin Hart; and tech figures Sophia Amorouso, Naval Ravikant and Kyle Vogt.
This Series C brings the total raised by Eight Sleep to $150 million, and the startup has confirmed to me that its valuation is now close to $500 million.
Matteo Franceschetti, Eight Sleep’s CEO, said in an interview that the funding will be used in a few ways.
First, the plan is to double down on building out more technology. Today, Eight’s Pod technology can detect your temperature, heartbeat and breathing and heat or cool a bed accordingly. Tomorrow, that could also include more physical products, additional ambient factors like lighting, and other diagnostics related to you, the sleeper.
Second, Eight Sleep wants to expand internationally, with plans to sell New York-based Eight Sleep products across Europe and the UK by the end of this year. After all, it’s not just people in the U.S. who could use a better night of sleep.
Franceschetti — who co-founded the company with Massimo Andreasi Bassi, Andrea Ballarini, and Alexandra Zatarain — told TechCrunch that he came to think about sleep and the need to improve it by way of having been an avid and active sports enthusiast.
“I was into the idea of sleep as recovery,” he said. “That is how we came up with the idea of sleep fitness.” Sleep he said, “is not just a waste of time.” Extrapolating that, it’s not just important for athletes, but everyone, to have better quality sleep.
“The vision for us is to compress your sleep and save your life,” he said. A good six hours, he added, “are better than eight hours that are not.” The company’s original name, Eight, was in reference to those fabled eight hours. Eight Sleep claims that when people use its products, they fall asleep 40% faster, get up to 20% more deep sleep, experience 30% fewer mid-night wake ups, and up to 30% fewer tosses and turns.
(But can it get me to stop worrying about Covid, the economy and societal collapse, whether my kids will be happy in life, and if we remembered to lock the door downstairs? Or maybe all of those just seem less serious when you are actually comfortable in bed…)
While Eight has definitely had a lot of traction with athletes — some 100 big names use it today — it’s hoping that the big boom in quantified self technology — hardware and software built to measure our blood pressure, heart rate, how much we sleep, how much we walk or do other activities, and much more — will mean that it can ultimately have a mass market appeal.
Indeed, we are living in a world with wearable tech that tracks our every movement is nothing new. And, as computing and communications technologies have become smaller and more portable, and infinitely more powerful, and cloud technology and advances in big data analytics has made the gathering of data and the ability to parse it more sophsiticated, we have only seen the possibilities for how that can be used to measure (and potentially “improve”) our lives increase.
Within that, sleep has been a large category of opportunity both for startups and tech companies. Earlier this year, Oura raised $100 million for its fitness and sleep tracking rings; others like Zeit have been exploring how to use wearable technology to address more acute sleep-related issues like sleep strokes.
Larger tech companies are not asleep at the wheel, either. Google recently updated its Nest Hub to track sleep; and even Apple has acquired a sleep tech company, Beddit (that deal was back in 2017, however, and it has been years since that hardware was updated: that could be one sign that Apple was more interested in using some of the technology in some of its other health-related efforts).
All this points to many more developments in a sleep tech market estimated to be worth some $30 billion. Within that Eight Sleep has been on a roll, with revenues for 2021 currently on track to triple versus 2020 on the back of two main products, a mattress that retails for $2,500 and a smart cover that sells for $1,500. (The company does not disclose user numbers but Franceschetti said that the figures are in the “several thousands,”)
2021 revenue is on track to more than triple vs. 2020. The funds will be used to accelerate the company’s innovation and technology roadmap and grow the size of the team.
“The sleep tech market is only in its infancy. The opportunity is limitless, as we spend up to a third of our lives asleep. Consumers are increasingly focused on sleep fitness as the understanding of how deeply important sleep is to overall health becomes more widely known,” said Antonio Gracias of Valor Equity in a statement.
Gracias founded Valor and is joining the board with this round, and as with other investors, he seems to have been won over in part by becoming a user: “The first night I slept on the Pod I knew we had to get involved,” he said. “We’ve seen this in our portfolio many times – Eight Sleep’s products and technology are disrupting the sleep market, and its rapid innovation is outpacing the competition as it builds a new sleep fitness focused category that delivers results.”
From Diogenes the Cynic to Audre Lorde to a former factory worker in China, the “lying flat” movement is gathering steam.
In “Macbeth,” Shakespeare described sleep as the “chief nourisher in life’s feast.” But like his titular character, many adults aren’t sleeping well. Revery wants to help with an app that combines cognitive behavioral therapy (CBT) for insomnia with mobile gaming concepts.
Founded in March 2021, Revery is currently in beta stealth mode and plans to launch its app in the United States later this year. The company announced today it has raised $2 million led by Sequoia Capital India’s Surge program. Participants included GGV Capital, Pascal Capital, zVentures (Razer’s corporate venture arm) and angel investors like MyFitnessPal co-founder Albert Lee; gaming entrepreneur Juha Paananen; CRED founder Kunal Shah; Mobile Premier League founder Sai Srinivas; Carolin Krenzer; and Josh Lee.
Lee, a mutual friend, first introduced Revery’s founders, Tammie Siew and Khoa Tran, to one another. Before launching the startup, Siew worked at Sequoia Capital India, Boston Consulting Group and CRED, while Tran was a former product manager at Google.
Revery plans to focus on other mental health issues in the future, but it’s starting with sleep because “it has such a strong correlation with mental health and we’re leveraging protocols, cognitive behavioral therapy for insomnia, that’s robust and have been tried and tested for 30 years,” Siew told TechCrunch. “That is the first indication, but the goal is to build multiple games for other wellness indications as well.”
A study by research firm Infinium found that about 30% to 45% of adults in the world experience insomnia, a problem exacerbated by the COVID-19 pandemic. Chronic lack of sleep is linked to a host of health issues, including high blood pressure, strokes, depression and lowered immunity.
For Revery’s team, which also includes former Zynga and King lead game designer Kriti Sawa and software engineer Stephanie Wong, their focus on sleep is personal.
“Everyone on our team has a deeply personal connection to the mission, because everyone on our team has experienced, or had a family member or friends go through challenges in mental health,” said Siew. “They’ve seen how late intervention creates consequences that could have been avoided if they had gotten help earlier.”
When Tran was 15, he was diagnosed with hypertension and several other health conditions that needed medication. It wasn’t until he was 26 that Tran found out that sleep apnea was at the root of his medical issues. After getting surgery, Tran’s blood pressure became normal and many of his other conditions also improved.
“When I finally got treatment for my sleep disorder, only then did I realize the impact of sleep on mental health,” Tran said. “For me, I was really lucky that a doctor caught my sleep disorder and super lucky to have the time and resources to get treatment. For many people, it’s incredibly inaccessible.”
Revery’s medical advisory team includes the doctor who performed Tran’s surgery, Stanford Sleep Surgery Fellowship director Dr. Stanley Liu; Stanford professor and behavioral sleep medicine expert Dr. Fiona Barwick; and Dr. Ryan Kelly, a clinical psychologist who researches how video games can be used in therapy.
When people think of sleeping apps, ones that focus on meditation (Calm and Headspace, for example) or soothing noises usually come to mind. The Revery team isn’t sharing a lot of details about its app before launch, but says it draws from casual mobile games, which are designed to get people to return for short play sessions over a long period of time. The goal is to use gamification to make CBT practices interactive and fun, so it becomes part of users’ daily routines.
“That’s the same kind of gameplay that Zynga and King have used, which is why Kriti’s experience is super helpful,” said Siew. Casual games revolve around rewarding people for small actions, and for Revery app, that means positive reinforcement for habits that contribute to better sleep. For example, it will reward people for putting down their phones.
“I think a lot of people have the misconception that solving sleep is only at the time you fall asleep. They don’t realize that sleep is impacted by what you do throughout the day,” Siew said. “A big part is also what are your thoughts, behavior and the other things that you do, so in order to effectively and sustainably improve sleep, we also have to change your thoughts and behaviors outside of the time you’re trying to fall asleep.”
In a statement, GGV Capital managing director Jenny Lee said, “We are excited about the growing mental wellness market, and believe that Revery’s unique mobile game-based approach has the opportunity to create immense impact. We are happy to back such a mission-driven team in this space.”
He disputed the Freudian view that dreams held encrypted codes of meaning, believing instead that they resulted from random firings of neurons in the brain.
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