Thread by @austinschless

Two entrepreneurs host a sleepover party.

The party ends and they're given $25k to start a business.

THREAD: The fascinating story about building a "sleep fitness" startup valued at $500 million.

1/ @m_franceschetti grew up in Italy.

As a kid, he was a competitive ski racer and tennis player.

He was obsessed with optimizing his performance.

But two things held him back...

2/ Injuries and fatigue.

When Franceschetti was 10, he got into a big ski accident.

When he was ~16, he had two knee surgeries.

He quit ski racing and tennis and started racing cars.

He spent his weekends whizzing around a track at 180 mph...

3/ In 2005, Franceschetti got his law degree.

He became a securities lawyer at one of the top firms in Europe.

One year later, he quit his job to start a renewable energy company.

The company was profitable from day one...

4/ In late 2012, Franceschetti and his partner sold the company.

High off the acquisition, they moved to the states...

Raised $3.5 million...

And started up the same renewable energy company.

Business was great, but Franceschetti was not...

5/ For the next 2 years, Franceschetti's health suffered.

He was working long hours.

Juggling 4,000 different tasks.

And managing massive amounts of stress.

He needed more time to work, but not at the expense of his health...

6/ Franceschetti started looking into sleep.

If he could sleep less, he'd have more time to work.

"If I'm going to live 100 years, I'm going to spend 33 years of my life on a dumb piece of foam. Maybe I can fix that."

Matteo envisioned a "smart" mattress...

7/ Franceschetti and his cofounder @maghis began building a prototype.

They hacked a bunch of sensors and essentially built a heating pad.

They were curious for feedback.

So they invited their friends over for a pajama party.

That party would change their lives forever...

8/ Everyone wore pajamas and tested the product.

Their friends loved what they had built.

At the end of the night, someone wrote them a $25,000 check.

Luna was born...

9/ Eager to get Luna off the ground, they turned to @ycombinator.

Sadly, they were rejected twice!

Frustrated, they changed their name to "Eight" and ran an @Indiegogo campaign.

They raised $1.2 million and generated 1,000s of pre-orders.

10/ After their Indiegogo campaign, they applied to YC for the 3rd time.

3rd time's the charm...

They got in!

Upon completing YC, they raised a $6 million seed round.

They used the cash to fulfill over 6,000 pre-orders and to finance product development.

11/ After studying over ~2 million hours of sleep data, they launched The Eight Sleep Mattress.

The mattress featured temperature control, smart alarms, and integration with smart home products.

But would it sell?

12/ By 2018, they sold over 20,000 products and tracked over 15 million nights of sleep.

They learned that @eightsleep users fell asleep 40% faster than non-users.

These stats helped them raise $14 million in Series B funding.

They'd use the money to improve distribution.

13/ On August 30th, 2021, Eight Sleep announced it had raised $86 million in a Series C funding round.

The round was led by Valor Equity Partners and valued Eight Sleep at nearly $500 million.

Shaking up an estimated $30 billion sleep tech industry.

14/ Eight Sleep has raised ~$160 million to date from some of the world's greatest investors and athletes:
• @sophiaamoruso
• @APompliano
• @Jason
• @naval
• @JDMartinez28
• @AROD
• @patrick_oshag
• @KevinHart4real

15/ Eight Sleep is currently working with some of the best athletes and businesses in the industry:
• Justin Medeiros
• @DGreen_14
• @BarrysBootcamp

16/ So what's next for @eightsleep?

In a recent release, Franceschetti says:

“The vision for us is to compress your sleep and save your life.”

They plan on building out more technology and expanding internationally across Europe.

17/ For more on the @eightsleep story, check out these resources:
• @patrick_oshag joincolossus.com/episodes/36513…
• @michaelgervais - findingmastery.net/matteo-frances…
• @fittinsider - insider.fitt.co/21-matteo-fran…
• @justinkan - justinkan.com/feed/matteo-fr…
• @kallawavy - thefounder.substack.com/p/eightsleep

@eightsleep @patrick_oshag @michaelgervais @fittinsider @justinkan @kallawavy If you liked this thread, retweet the 1st tweet to teach a friend about sleep fitness:

https://twitter.com/austinschless/status/1454424601690263555?s=20

For more untold startup stories, follow me @austinschless

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*pajama party 💤