Casper Sleep has warned investors that the runaway power of social media influencers could “adversely affect our reputation” and put their money at risk after filing to launch an initial public offering (IPO) on Friday.
The online mattress retailer, valued at more than $1 billion, is hoping to raise $100 million in an IPO set to be handled by Morgan Stanley, Goldman Sachs and Jefferies.
In its offering documents Casper highlighted the growing danger of social media influencers and their ability to make or break brands without their control.
Having risen to prominence after Kylie Jenner, who boasts more than 150 million Instagram followers, plugged its mattresses Casper is now warning such influencers could “subject us to regulatory investigations, class action lawsuits, liability, fines or other penalties”.
“Use of social media and influencers may materially and adversely affect our reputation,” it said.
“Influencers with whom we maintain relationships could also engage in behaviour or use their platforms to communicate directly with our customers in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect us.”
Influencer marketing has become an integral part of how retailers reach out to customers and has grown at breakneck speed to be worth more than $8 billion.
For online start-ups like Casper they provide an effective and relatively inexpensive form of advertising, however its statement marks a cautious change in attitudes towards the medium.
Despite being valued at over $1 billion Casper is still a loss-making business, seeing losses grow slightly to $67.3 million in the first nine months of 2019 year-on-year.
It said it plans to use the funds raised from the IPO would be used for working capital and to repay its debt pile.