Startup Deep Dive : The Sleep Company — how a D2C mattress brand ended up earning most of its money offline

In FY25, The Sleep Company sold ₹499 crore ($52 million) worth of mattresses, pillows and recliners, up 60% from the year before — and it did most of that selling through 150-odd physical stores, not the website it was built on. A brand that launched in October 2019 as a pure online D2C play now earns roughly seven of every ten rupees offline, the opposite of the story it is usually told as.

That reversal is the real plot of this company. It did not become a retailer because the internet stopped working for it. It became one because a founder with back pain, a patented foam substitute, and a habit of ignoring category conventions decided that a mattress is something people need to lie down on before they buy — and built 150 stores to prove it, while still keeping the manufacturing and technology edge that got it funded in the first place.

Quick facts

What they do

The Sleep Company makes and sells “comfort-tech” products built around SmartGRID, a patented hyper-elastic polymer grid the company positions as a replacement for the memory foam that has sat inside mattresses since the 1960s. The core product is still the mattress, but the range has widened to pillows, seat cushions, recliners, sofas and office chairs, sold to urban Indian households and, increasingly, to workplaces buying ergonomic seating. What makes the company unusual is not the product category — India’s mattress market is old and crowded — but the route to the customer: it launched purely online, through its own website, Amazon and Flipkart, and has since built one of the fastest-scaled store networks in Indian D2C, crossing roughly 150 outlets within about three years of opening its first one.

The origin

The company traces back to a personal problem rather than a market study. Priyanka Salot, pregnant with the couple’s first child in 2019, struggled with insomnia and back pain and could not find a mattress that helped, according to Forbes India’s account of the founding story. She and her husband Harshil Salot, both IIM Calcutta alumni, had spent years in corporate roles before that; the frustration of hunting for a decent mattress in a market where the underlying foam technology had not meaningfully changed in decades became the reason to build one themselves. They licensed a Japanese-origin hyper-elastic polymer grid technology, branded it SmartGRID, and secured patents for it in India, Japan, Saudi Arabia and the UAE (with further filings pending elsewhere), per Startup Talky’s reporting on the company. The bet was narrow and specific: a mattress company could win not on marketing alone but on a genuinely different material, sold directly, without the margin stacking of traditional mattress retail.

The struggle years

The Sleep Company did not raise its first institutional round until June 2021 — roughly a year and a half after its October 2019 launch, and through the worst of the COVID-19 disruption to both retail and manufacturing, according to Tracxn’s funding timeline, which records Fireside Ventures’ first investment on that date. For a company selling a considered, big-ticket purchase online in a category owned by decades-old names like Kurlon and Sleepwell, that meant scaling almost entirely on its own steam through the pandemic years.

The second, more revealing setback came after the money arrived. In FY24, revenue grew 2.5x to ₹312 crore from ₹127 crore in FY23 — an impressive jump — but losses grew even faster, up 58% to ₹58.69 crore from ₹37.06 crore the year before, as reported by Entrackr from the company’s regulatory filings. Growth alone was not fixing the unit economics; the company was spending more to make each incremental rupee of revenue, precisely the pattern that has sunk other well-funded Indian D2C brands when capital markets tighten. It took another full year — and a shift in channel mix towards physical retail — before that trend reversed in FY25.

The turning point

The pivot point was a single store. In June 2022, The Sleep Company opened its first physical outlet in Koramangala, Bengaluru, according to reporting in Free Press Journal and Indian Retailer at the time — a company-owned, “phygital” format where customers could touch and carry small accessories on the spot while larger items like mattresses were still ordered for home delivery. Before that store, the business was effectively 100% online, competing for attention and margin inside Amazon and Flipkart listings. Within about 18 months, Indian Retailer reported the company had scaled past 60 stores and 16 experience centres across more than 20 cities, and offline was already contributing roughly half of revenue. By the time of its August 2025 Series D round, offline channels accounted for about 70% of total sales, per Inc42’s reporting on the raise — a full reversal of the channel mix the company was built on, and the clearest evidence that a mattress, unlike a phone case, sells better when someone can lie on it first.

The money behind it

The Sleep Company has raised money in five recorded rounds since 2021, taking total funding past $100 million, according to Tracxn. Fireside Ventures was the earliest institutional backer, investing in the June 2021 seed round and staying on through subsequent rounds; Entrackr’s reporting notes Fireside sold some of its stake as part of a secondary component in the August 2025 round, a partial exit rather than a full one. Premji Invest joined by November 2022, when Entrackr reported the company raising $21.3 million in a round it led, and became a repeat backer, co-leading the $22 million (₹184 crore) Series C in December 2023 alongside Fireside — a round Entrackr said valued the company at more than double its previous round.

The largest round to date is the Series D, which closed in August 2025 at ₹480 crore (about $54.6–57 million across sources), led by private equity firms ChrysCapital and 360 ONE Asset Management, with Saffron Investments, Carillon Investments and Infinity Partners also participating, per Inc42 and Outlook Business. Entrackr had estimated, ahead of the round closing, that the raise would value the company at around ₹2,745 crore (about $323 million), an 80% jump from an estimated ₹1,500 crore at the time of the Series C — a figure Dealroom.co’s tracking independently lists as well, though the company itself has not publicly confirmed the exact number. Avendus Capital advised on the transaction. The company said the fresh capital would go toward new manufacturing capacity, deeper offline expansion into metro and tier-I cities, new product categories and R&D, per Inc42’s coverage of the announcement.

How it makes money

The business is straightforward retail economics wrapped around a proprietary material. Revenue comes from selling finished mattresses, pillows, recliners, sofas, office chairs and bedding accessories at a premium to commodity foam products, justified by the SmartGRID patent and marketing around spinal alignment and cooling. The company manufactures in-house rather than relying entirely on job work, which is part of why the August 2025 funding round earmarked money for new manufacturing capacity rather than only stores.

Costs sit in three large buckets, based on Entrackr’s breakdown of the FY25 financials: cost of materials, at roughly ₹220 crore or about 40% of total costs, and growing faster than revenue as the company scales manufacturing and store inventory; marketing, at about ₹105 crore, which grew more slowly (5%) than revenue, a sign that customer acquisition is becoming more efficient as brand recall builds; and a large “other expenses” line of about ₹213 crore covering logistics, store operations and technology. Put together, the company spent about ₹1.10 to earn every ₹1 of operating revenue in FY25 — better than in FY24, but still loss-making. The part people tend to get wrong about a D2C mattress brand is assuming the margin sits in digital marketing efficiency; increasingly, for The Sleep Company, it sits in owning the store network and the factory, which is expensive to build but harder for a pure online competitor to copy quickly.

The numbers

All figures below are revenue from operations and net loss as reported in the company’s regulatory filings, compiled by Entrackr (revenue, FY23–FY25) and Inc42 (FY25 net loss); figures are in ₹ crore.

The direction matters more than any single year: revenue nearly quadrupled between FY23 and FY25, while the net loss, after peaking in FY24, narrowed even as the business kept opening stores. EBITDA loss followed the same path, improving to ₹39 crore in FY25 from a wider loss the year before, with EBITDA margin moving to about -7.8% from about -18.9%, per Entrackr. The company has said publicly it is targeting ₹750 crore in FY26 revenue, a further 50% jump, according to BW Disrupt’s interview with the co-founders.

Where the money comes from

The clearest split is channel, not geography: offline stores contributed about 70% of revenue by mid-2025, with online — the company’s original and only channel until 2022 — now the minority contributor, per Inc42’s reporting around the Series D round. Store count itself tells the growth story: from a single Bengaluru outlet in June 2022 to roughly 150 stores by mid-2025 and, per Indiaretailing’s coverage, a stated ambition to reach 450–500 stores across the top 100 Indian cities within three to four years, up from about 160 stores across 47 cities at the time. The surprise for a brand that markets itself on a patented material is that its most valuable asset today may be retail real estate and store-level conversion, not the SmartGRID patent alone — the technology opened the door, but the stores are what turned browsers into buyers at scale.

The risks

Three risks stand out. First, competitive intensity: The Sleep Company sits in a mattress and home-comfort market that includes long-established manufacturers such as Kurlon and Sleepwell, and other funded D2C-turned-omnichannel rivals such as Wakefit and Duroflex, all chasing the same tier-I and tier-II store real estate and the same online search traffic. Second, the economics of rapid store expansion: opening physical stores converts a variable, marketing-driven cost structure into one with fixed rent, staffing and inventory carrying costs across each of the roughly 150 (soon to be several hundred) locations; if same-store sales growth slows before that fixed cost base is covered, the EBITDA losses that narrowed in FY25 could widen again. Third, continued dependence on external capital: the company remains loss-making by its own regulatory filings even after four fundraising rounds, and its most recent raise included a secondary component that let an early investor partially cash out — a structure that works while growth stays strong but leaves less room for error if fundraising conditions tighten, given the business has not yet reached profitability on a full-year basis.

The takeaway

The lesson here is not “go omnichannel” as a slogan — plenty of D2C brands have opened stores and struggled. It is that a genuinely differentiated product bought once every several years benefits from a channel where the customer can verify the difference in person before paying a premium for it, and that a founder team willing to reverse its own founding channel strategy, twice over just a few years, is often better positioned than one wedded to being “digital-first” as an identity rather than a starting point.

Frequently asked questions

Who founded The Sleep Company and when?

Harshil Salot and Priyanka Salot, both IIM Calcutta alumni, founded the company, which launched digitally in October 2019 under the legal entity Comfort Grid Technologies Private Limited.

What is SmartGRID technology?

SmartGRID is a patented hyper-elastic polymer grid, licensed from Japanese-origin technology, that The Sleep Company uses in place of traditional memory foam in its mattresses and cushions; the company holds patents on it in India, Japan, Saudi Arabia and the UAE, per Startup Talky’s reporting.

How much has The Sleep Company raised, and at what valuation?

The company has raised more than $100 million across five rounds since 2021, according to Tracxn, including a ₹480 crore Series D in August 2025 led by ChrysCapital and 360 ONE Asset Management. Entrackr and Dealroom.co have separately put the valuation around that round at approximately ₹2,745 crore (about $323 million), though this figure has not been officially confirmed by the company.

Is The Sleep Company profitable?

No. The company reported a net loss of about ₹48 crore in FY25 on revenue of ₹499 crore, according to Inc42 and Entrackr’s review of its filings, though both revenue growth and the pace of losses have been improving year on year.

How many stores does The Sleep Company operate?

The company had roughly 150–160 company-owned stores across about 47 Indian cities as of mid-2025, and has stated an ambition to scale to 450–500 stores across the top 100 cities within three to four years, per Indiaretailing’s coverage of the company’s retail expansion.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr, “The Sleep Company’s revenue spikes 60% to Rs 499 Cr in FY25”, October 2025
• Entrackr, “The Sleep Company revenue soars 2.5X to Rs 312 Cr in FY24”, 2024
• Entrackr, “Exclusive: The Sleep Company to kick off Series D round with 80% valuation surge”, July 2025
• Entrackr, “The Sleep Company raises Rs 480 Cr in primary and secondary funding”, August 2025
• Entrackr, “The Sleep Company bags $21.3 Mn led by Premji Invest”, November 2022
• Inc42, “The Sleep Company Financials 2026 – Revenue, P&L & Cash Flow”, 2026
• Inc42, “The Sleep Company Bags INR 480 Cr From ChrysCapital, 360 ONE Asset”, August 2025
• Outlook Business, “The Sleep Company Bags ₹480 Cr in Series D from ChrysCapital, 360 ONE Asset”, August 2025
• Tracxn, “The Sleep Company – Funding Rounds & List of Investors”, accessed September 2026
• Dealroom.co, “The Sleep Company raises $12.3M Series D”, 2025
• Forbes India, “Work, sleep, repeat: The Sleep Company & the right doze”
• Startup Talky, “The Sleep Company: Redefining Comfort with SmartGRID Mattress”
• Free Press Journal, “The Sleep Company kicks off offline retail expansion with outlet in Bangalore”, 2022
• Indian Retailer, “After Rs 500 Crore ARR in 4.5 years, The Sleep Company Targets 200 Stores in 12 Months!”
• Indiaretailing.com, “200 Stores, 200 Weeks: The Making of India’s Fastest Retail Sprint in Comfort”
• BW Disrupt, “The Sleep Company Eyes Rs 750 Cr Revenue In FY26 With 50% Growth Push: Co-founders”
• YourStory, “The Sleep Company raises $22M Series C funding”, December 2023

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