Resident 2020

Launched in 2016, Resident was a leading player in the direct-to-consumer bed-in-a-box mattress market, where it was one of at least 175 venture-backed companies competing in the space. By late 2020, it had realized over $500 million in revenue, profitability in the high single digits, and over a million mattresses sold. Resident deployed a multi-brand portfolio strategy to target a value-oriented consumer looking for a high-quality mattress at a fair price. Based on a philosophy of entrepreneurship shared by the three original founders (who served as co-CEOs), most operations were outsourced, including design, manufacturing, warehousing, shipping, and last mile delivery. This enabled them to focus on performance marketing using largely digital channels. While the company had experienced a range of scaling challenges, from product quality and inventory availability to customer service and cash flow issues, it was reasonably stable. The venture had been largely bootstrapped, with a small Series A raise of $15 million. But in December 2020, the remaining two founders and co-CEOs raised $130 million, following a roller-coaster year in which pandemic impacts had first disrupted and then accelerated the business. With capital on the balance sheet, sales doubling year on year, and operations cash flow positive, the founders wondered, was now the time to take the company public?