Mattresses Finally Go Deep Tech

On 27th July 2022, Tempur Sealy, a global, established leader in mattresses, adjustable bases, pillows and other sleep and relaxation products, made a strategic investment in tech company, Bryte. The deal is another step in Tempur Sealy’s core mission to improve the sleep of more people, every night, all around the world.

Tech – Bryte: Bryte is a restorative sleep technology platform powering the future of sleep through licensing to leading mattress manufacturing partners, supplying hotels, and selling direct to consumers. The company's hardware enabled SaaS platform uses artificial intelligence and machine learning technology to redesign and continuously optimize the sleep experience, enabling scientists and technologists, to deliver the ultimate sleep experience. Prior to this round, the company has raised over $30 million from investors including ARCHina Capital, 10x Group, Evolution VC Partners and more.

Non-Tech – Tempur Sealy: Tempur Sealy International Inc is one of the world's largest bedding providers. The company develops and distributes bedding products globally through its North America and international segments (Europe, Asia Pacific, and Latin America). The company's brand portfolio includes many highly recognized brands in the industry, including Tempur?, Tempur-Pedic?, Sealy? featuring Posturepedic? Technology, and Stearns & Foster?. The company’s products allow for complementary merchandising strategies and are sold through 5,400 third‐party retailers, 650+ company‐owned stores worldwide and the company’s e‐commerce channels.

DIGITAL TRANSFORMATION OF BEDDING SOLUTIONS

On 27 July 2022, Tempur Sealy led a strategic investment round of $20m into Bryte.

Founded in 2016, Bryte’s in-bed technology measures, learns, tests, and applies what each sleeper needs to optimise their restorative sleep through real-time in-bed personalized comfort adjustments and relaxation experiences and services.

Moreover, the Bryte technology is purpose-built as a platform of hardware, software and AI services that can be seamlessly integrated into the product lines of select mattress brands, in service of reaching and benefiting more sleepers, more quickly.

The success of Bryte's flagship product - The Restorative Bed? - demonstrates the capability of the platform to improve restorative sleep by increasing total sleep time, improving sleep efficiency (reducing night-time wake events), and optimizing the balance of Light, Deep and REM sleep for each individual sleeper.

The Restorative Bed is popular with celebrities and can be found in the suites of luxury hotels such as Four Seasons Hotel Los Angeles at Beverly Hills, Fairmont Scottsdale Princess, Park Hyatt New York, as well as Rosewood locations, among others.

The deal demonstrates Tempur Sealy’s ability to adapt to technological shifts and to serve consumer’s needs.?

"Our mission is to empower lives through restorative sleep, which starts by reaching as many people as possible, with the most technically advanced products and first-rate services at a complete range of price points." - Luke Kelly, CEO, Bryte

The deal rationale revolves around Tempur Sealy’s goal of improving the sleep of more people around the world with meaningful innovation. This will also help Tempur Sealy digitally transform its products to provide the benefits of tech-enabled restorative sleep to consumers across 100 countries.?

“We founded Bryte with the vision to integrate the latest technology and sleep science into delightful experiences that truly deliver impactful restorative sleep products & services. With Tempur Sealy, we have an amazing investor that shares our vision.?We are excited to develop technologies and capabilities to lead the industry in creating breakthrough products and experiences together”? - Ely Tsern, Co-Founder and CTO of Bryte

ANOTHER TECHQUISITION DEAL GENERATES SIGNIFICANT SHAREHOLDER VALUE

?Like most other techquisition deals, the market reacted favourably to the Bryte investment announcement given the positive outlook associated with the strategic potential of the investment and how it fits with Tempur Sealy’s business strategy.

Tempur Sealy’s share price increased by approximately 15% from July 26 to August 1 – vs. an increase of only 5% in S&P 500 – implying an addition to Tempur Sealy’s market value of net ca. $430 million.

INDUSTRY DISRUPTION

?The size of global Sleep Aids market is estimated to grow from $79 billion in 2022 to $125 billion by 2030, representing a CAGR of 5.9%.?

The main factor driving the development of the market for sleeping aids is the altering sleep form of the worldwide population caused by altering lifestyles. Additionally, the growing wealth of the consumers attached with the better contact with medical facilities on account of the increasing claim for worth health care is predicted to grow the market.

In addition, the sleep quality is also caught up due to more working hours, a hectic working environment, working different shifts, and tense situations, along with additional workload.

Sleep-inducing pillows and mattresses are more popular all over the world, and this has directly affected the development of the sleeping aids market. Increasing cases of the restless-leg syndrome and sleepwalking have also covered the arrival of huge revenues in the worldwide market of sleeping aids. Narcolepsy is also a sporadic condition that can be treated and controlled with the support of sleep aids.

The impact of COVID-19 on the sleep aids market was recorded to be negative. This was attributed to decrease in demand of sleeping aids devices for the sleep disorders.

Moreover, market players have reduced investment in raw materials and resources, owing to closure of manufacturing facilities to protect workers in all the regions.

Another key feature of sleeping aids is the growing acceptance of wearable sensors and tracking devices. Sensor-equipped systems make diverse motives like evaluating the excellence of sleep and chasing sleep illnesses.

North America is the leading region in the overall sleep tech market. However, the Asia-Pacific region expected to register rapid growth rate in the coming years. The growing number of obstructive sleep apnea cases in countries like China and India is likely to boost the demand for sleep tech devices.

For instance, according to a study performed in rural India, the occurrence of obstructive sleep apnea by Apnea Hypopnea Index (AHI) criteria is 3.7%. In absolute numbers, this accounts for 36.4 million individuals suffering from OSA in rural India.

Based on product, the mattresses and pillows segment held the highest market share in 2020, representing more than half of the total market share, and is expected to continue its leadership status during the forecast period. However, the sleep laboratories segment is estimated to register the highest growth in the forecasted period.

CLEAR TRANSFORMATIONAL OPPORTUNITY

The promise of evolutionary learning has long excited AI researchers, but few applications are as meaningful as solving the complex problem of sleep.

Tempur Sealy expects that its investment in Bryte will help revolutionise the sleep technology industry. It completely aligns with Tempur Sealy’s goals of improving the sleep outcome for people through innovation.

Tempur Sealy intends to seamlessly integrate the technology into its products, offering a unique and innovative solution which fits in the company’s long-term brand strategy.

This follows the acquisitions of Dreams (UK) and Sherwood Bedding by Tempur Sealy in the last few years.

THE QUOTE

“It has long been clear to us that meaningful innovation improves sleep outcomes for millions of people. With Bryte we have invested in a company that is committed to innovation with an elegant, seamless integrated product that we believe fits our long-term brand strategy. We are excited to form a relationship with their talented team” -?Scott Thompson, Tempur Sealy Chairman and CEO

Tempur Sealy’s investment is a great example of how a traditional business (the bedding industry) is actively engaged in the journey of transforming itself to deliver greater value to its stakeholders – particularly its shareholders and customers – by properly positioning itself for the future, ready to tackle any disruptions, especially in a pandemic.

The essence of such a transformation unfolding is embedded in a strategy execution approach we have trademarked and call Techquisition, which my firm, Aquaa Partners, has designed and delivers to its clients every day as an experienced and trusted expert partner.

You can learn more about why Techquisition is becoming the value creation strategy of choice today for ambitious C-suite leaders in my book, Go Tech, or Go Extinct:

Go Tech, or Go Extinct: How Acquiring Tech Disruptors Is the Key to Survival and Growth for Established Companies

Paul Cuatrecasas is the founder and CEO of the investment banking firm,?Aquaa Partners,?and the author of?Go Tech, or Go Extinct?in which he shares his revolutionary approach to transforming legacy companies into forward-thinking industry leaders through the strategic acquisition of disruptive technology companies.

Source(s): Aquaa Partners, Company Websites, Press Releases, PitchBook, Yahoo Finance, PR Newswire, Globe Newswire, Precedence Research, Tech Funding News, Allied Market Research