← The Jaeden Schafer Podcast
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Eight Sleep has just raised a hundred million dollars to expand its AI powered sleep technology. So today on the podcast, I want to be diving into basically what they plan on spending the money on is this hype and I don't know all of this. Overall, a very interesting company, but there's a lot of interesting caveats that I don't know. I think it's funny when we try to put AI into literally everything, and in this case, we're putting AI into your mattress. So let's get into it. Before we do, I wanted to mention, if you want to try any of the AI models I talk about on the show, I'd love for you to try out my own platform called AI box.com AI which is currently in beta and allows you to access the top 40 AI models all on one platform for 19amonth. So the beauty about AI box is essentially you can switch between different AI models in the same chat. If you want to use 11 labs to create an audio file and you want to use Claude to generate the script that's going to be read, you can do all of that in one chat. And you also can generate images inside of there and tons of other things. You can compare results side by side. There's a lot. And we're adding new features all the time, so I'd love for you to check it out. I'll leave a link in the description. Hopefully this helps you save money and try out a ton of new AI models on AI box. AI. All right, let's get into what's going on with Eight Sleep. So they've just raised $100 million. And this is not a very. This is not a super new company. This has been around since 2014. And basically up until now, they've kind of had this like smart mattress technology. You buy this mattress and it gives you insights about how you sleep. They have a whole bunch of biometric sensors embedded into the mattress so it knows what your heart rate is and kind of all of this information about you. So up until now, it's basically just been regular smart tech. And now the new era of AI is getting embedded in there. What does that mean to have AI in your mattress? Well, let me tell you, but first, let's say they have just raised this hundred million dollars and they're getting it from some very big investors. This isn't, you know, I know, super obscure. They have hsg, Valor Equity Partners, Founders Fund, Y Combinator. They have the Ferrari F1 driver, Charles Leclair, Zach Brown, who's the CEO of McLaren F1 they these guys are kind of into venture investing lately, which is honestly cool. I love to see elite athletes get into the world of venture. It's always fun. With this round, they've now raised over $260 million. If you look over at PitchBook, they previously raised 86 million in a Series C back in 2021. So I will say the thing that's exciting here. Well, it is interesting. Okay, this is interesting and we see this with everybody in the market. Basically a lot of these big Companies raised in 2021 when valuations were sky high. It felt like everything fell off after that. Once quantitative tight and there wasn't so much free flowing money, valuations all tanked and it was really hard for a lot of these companies to get back up to a valuation that was anywhere near 2021. And so a lot of these companies did down rounds. A lot of companies went bankrupt if they couldn't continue. So what I've noticed is a lot of the companies that are now that raised in 21 that are raising today, they are raising on an AI premise. And if you. I'll talk a little bit about what they're doing here but basically to me it doesn't feel like this is a product they didn't raise money for, a product they necessarily had or a feature that was widely adopted, but for the promise of an explosive AI future embedded into their product. And maybe they already built it, but it wasn't super widely adopted or people didn't know about it. Anyways, it's interesting, it's basically like they raised in 2021 because it's a peak ZIRP era and they had to wait till kind of leveraging the AI hype to the max to try to get back and beat that valuation again. So interesting strategy but we see it basically all companies. So what they have said is that their valuation has doubled since their last round. They didn't say disclose any specifics but AI has doubled them. So these companies are AI is the lifeline they all needed. What's interesting, this is their cmo. Their CMO said if we successfully execute our AI roadmap, launch internally or internationally and develop condition specific interventions, achieve achieving unicorn status will naturally follow. This is their co founder, CMO of eight Sleep which means it feels like he's saying that they haven't achieved unicorn status. Right? He's like if we, if we successfully execute everything on our roadmap, then achieving unicorn status is going to be easy. So basically it feels like they don't have a billion dollar valuation, but they have raised 260 million total. They just raised 100 million, so perhaps they have a 500. I'm just trying to like spitball, but I'm assuming they want to give up maybe 20% in this round. So they raise 100 million probably at a $500 million valuation. So it's not even a billion dollar valuation, which honestly is kind of crazy if you think about a $500 million valuation. They have raised total 260 million. So 50% of their valuation is just like, is more than that is just straight cash that has been raised. It's just interesting economics of these companies. Regardless, that's not the point of the podcast today. What's interesting is the AI things that they're integrating. So basically they have a software and now they built an AI that essentially tracks and the goal of it is to enhance your sleep quality. How does it do this? So basically their main product is called Pod and it has a bunch of features to help you measure your sleep, your heart rate, your breathing patterns, your movements. They use all of these insights and then they're going to automatically adjust the temperature of your bed, the elevation of your bed, how firm your bed is. They can also apparently detect snoring and they're going to automatically elevate the base to, to respond to like your snoring. So like, try to prop your head up a little bit more if that's going to clear out your sinuses. It's, it's honestly kind of hilarious. I think your bed is like moving and heating up and cooling down underneath of you to like try to give you this optimal night's sleep. Not a bad thing. It's just such so. It's so funny. There's such a, such a modern problem. We go from sleeping in caves to having a bed that like lulls us to sleep with the perfect, perfect heat. I find it so funny. They have more than $500 million that they've done in POD sales, which is amazing. Obviously $500 million. I would assume this is pretty expensive. Like we're selling high tech mattresses with stuff embedded. The shipping's expensive, so the profit I'm assuming isn't something crazy like ChatGPT's profit margins or other companies that are a little bit more strictly SaaS. Like they're quite heavily tied to a physical mattress product. And apparently though they have 10x their revenue since they launched their product in 2019. However, they raised in 2021 saying we 10xed since we launched in 2019, like our revenue, they use that like whatever, like some, some portion of that revenue growth they used in their last round of funding in 2021. So I think that's sort of irrelevant. They should probably be telling us from 2021, but maybe the revenue growth is only like 3 or 4x from 2021, but whatever, who am I to speculate? They have collected insights, so this is probably in my opinion their biggest asset to date is that they've collected insights from over 1 billion hours of recorded sleep data. And an interesting thing is they can record how someone sleeps without the interventions, how someone sleeps with the interventions, and basically determine what interventions are best to help someone have a better night's sleep and not wake up. Just over a hundred full time staff, so not an enormous company. They are now expanding to something called Sleep Agent, which is an AI driven system that basically leverages LLMs to create thousands of what they're saying are digital twins for each user and then predict outcomes. Now I don't know, I feel like a lot of this could be done without creating a digital twin of a person. But who am I? I think this is an interesting, interesting use case. They said the goal is to optimize nightly recovery. They say that this shifts sleep technology from reactive tracking to proactive. So basically like based off a whole bunch of, I guess, data that they've collected on you. And I feel like this would be even better if they could like tie this to your like Fitbit or something like that where it's collecting data on you throughout the day to see like if you did like a workout, if you're super tired or like that kind of information. But basically their goal with their digital twin is that they're going to try to make a digital twin so that beyond just being like, oh, this person is like getting cold, let's warm them up or they're super hot, let's make them cooler instead of just being reactive. They're like predicting, they're like we predict based off of these things. This is how they're going to be feeling and this is what they have a cold. And so we're going to do these things ahead of time, yada yada. So I don't know, it should be, it's really interesting to be honest. I'm really curious to see how it, how it goes. And I don't mean to seem super skeptical, but I'm a little bit skeptical. There's a bunch of people that are competing in kind of this like health bio space. We have aura Fitbit, Apple, we have whoop. There's companies like ResMed. Also there's other smart mattress and like sleep surface makers. Some people don't do like a full mattress. They just put like a topper on and they have all this stuff built into the topper. Some people say that makes more sense. So there's sleep number and there's chilly sleep. Both are kind of doing that. Their main differentiator, they say is their autopilot. So basically they say it quote, builds a personal blueprint print from night one and then adapts continuously, accounting for seasonality, travel, stress training, illness or even a bad night before. And it works independently for each side of the bed. Okay, that's kind of nice, right? We got two halves of the bed and you and your partner can both get custom adjusted temperatures that this is fantastic for people that complain about the blankets being too thick or thin or, you know, anything else. I don't know, I think it's kind of funny. Right now they're basically planning to use the new money to accelerate the growth in the medical sector. They're building out a health, a health monitor, basically something called Health Check. It's a system that can monitor your cardiovascular and respiratory patterns with a 99% accuracy without the need for a wearable device, according to the company. So they, this is kind of interesting. Basically they can tell from how you sleep and a lot of things about you how your body is feeling. And I think this makes a lot of sense for them to get into the health space because then it can get covered by insurance. And so I think for them this is kind of a, a no brainer and you could charge a ton of money for basically a cardiovascular monitor and respiratory monitor that you don't need to wear. It's super non invasive. You just go to bed and it monitors you. So if your insurance covers that, fantastic. They said we're not replacing your doctor. Oh, shocker. They're not replacing your doctor with their mattress. Okay. Thank goodness. I'm so relieved. Um, they say, but we are giving you nightly high accuracy health monitoring so you can act early if trends shift over time. This data can complement medical care. Actually, I do think this is useful. Right? I know I'm pessimistic on it all but like I think we've heard from a bunch of people that have like Apple smartwatches and then it's kind of triggered them to maybe you have some sort of heart condition or because of, you know, it's monitoring your pulse and stuff and people go and get checked and they find out they do. And so it was like thanks to this. And sometimes in some cases it saves people's lives. So like, I understand. I think basically you have that same technology in the mattress and it just seems like such a funny application. It's probably accurate. And to be 100% fair, I do not wear an Apple watch. I hate watches. I hate anything on my wrist personally. And so something like a mattress where if it could get a lot of great data for me and actually help me with my health, but I don't have to like wear anything, I think you could actually unlock a lot more use. Although I'm sure Apple will still outsell it by like a hundred thousand to one on the watches. Cause people like those still. I think that there's, there's a bunch of people that they maybe don't like watches that would like a whole mattress. Okay, this is one use case that I think is hilarious and kind of awesome. Apparently they've recently launched something called Hot Flash mode. It uses an AI driven cooling system to basically relieve menopause since symptoms. So if you're having a hot flash, it will cool down the whole bed. To me that's, that's super funny. Cool use case. I think it's also working on contactless solutions for sleep apnea. They're looking for FDA approval and they're going to use pods, real time biometric monitoring to deliver personalized interventions. So I think they're getting like really serious. They're getting into medical field, they're trying to get FDA approval. You can see where this is going. They want to get covered by insurance. Their mattresses are not cheap. I will say they currently ship to over 30 different countries. Canada, UK, EU nations, Australia, Mexico, UAE and they're planning to expand to China. Apparently when their CMO said that China is one of the world's largest consumer markets and there's a rise in health conscious middle class. And so this is kind of their next step of where they're going in regards to all of the data. They say that privacy is their quote. They said privacy is foundational. All data is encrypted, never sold and fully private. We comply with gdpr, ccpa, yada yada yada. Does this mean they never get hacked and their data leaked? No. So I mean I'll just put that out there. If that was really someone's like biggest concern, their sleep data was going to get like stolen. And you can imagine it's a mattress. There's all sorts of sensitive data that's probably stored on that. And I think for a lot of people maybe that would be a turn off enough to not want one of these mattresses. But for people with health problems or that are really big into monitoring their health, this might make a lot of sense. So it's interesting. I think a lot of their AI tools in here are useful. I think basically a lot of their algorithms or technology that might have been before the days of chat GPT are now just getting relabeled as AI, which is fine, everybody's doing it, whatever. So not too much shade. But yeah, overall I think this is interesting. I like some of their use cases and does it seem a little overkill to have an entire mattress monitoring your health? Maybe, but maybe there's some people that don't want to watch and this would be a good use case for that. And if it helps you sleep better, stop your menopause hot flashes, there's some great use cases there. So this could be great for some people. All right, thanks so much for tuning into the podcast. If you learned anything new, I would love it if you could leave a rating and review and also make sure to go check out AI box AI if you want to try all of the top AI models in one place, we currently have our beta open. If you have any feedback, thoughts or would love to see new features in this, let me know. We're adding features all the time. Hope you have a fantastic rest of your day. We'll catch you in the next episode.