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Miami’s active tech scene has gone to sleep. For an investment, that is.
SoftBank says it has picked a third company to receive funds via the $100 million Miami investment initiative it announced in January. The new recipient is Eight Sleep, a high-performance sleep company that sells tech-enabled, temperature-controlled mattresses. Its executives, and soon other employees, are moving from New York to the Magic City.
“We spend a third of our life on a mattress, which is otherwise just a piece of foam,” Marcelo Claure, SoftBank International Group CEO, told the Miami Herald at the venture giant’s offices in Brickell. “So someone who is studying what it takes to get a good night’s sleep ... that data and technology is so valuable.”
Founded in 2014, Eight Sleep has already raised more than $75 million for its smart mattresses, which automatically adjust temperature according to a user’s body characteristics and sleeping habits. They’ve been rated the top “smart” mattress, the top mattress for athletes, and the top cooling mattress for hot sleepers by SleepFoundation.org, a sleep resource site. They also connect to phones to provide a sleep report and tips for getting a better slumber. Mattresses start at $2,495, or $70 a month.
To make the investment, whose sum was not disclosed, SoftBank is tapping its $100 million Opportunity Fund, which is dedicated to supporting minority founders — in this case, Eight Sleep’s Alexandra Zatarain, a Latina of Mexican descent. Zatarain and her husband, Eight Sleep CEO Matteo Franceschetti, met in Miami and have visited “hundreds” of times. Zatarain also attended a University of Miami communications program for a year.
The company plans to announce additional “actions” soon that would further cement the company in Miami, Zatarain said.
“Having lived here for a year and being familiar with the culture, we feel it’s important to connect ourselves, beyond just people who want to move here, and give people here an opportunity to join our team and have amazing jobs,” Zatarain said.
Eight Sleep follows Miami-based startups Quiknode, a blockchain applications support firm, and cybersecurity company Lumu, in receiving backing via SoftBank’s Miami initiative. Since the first two investments were announced, Quiknode was selected for the prestigious Y Combinator accelerator, while Lumu disclosed it had accepted a $7.5 million investment round led by SoftBank.
Claure said SoftBank hopes to announce at least one new investment a month via the Miami initiative. He said the initiative had already received interest from 600 startups. Turning away a company is difficult, he said, but aside having a Miami connection, SoftBank’s standard criteria is that a target company must be capable of disrupting the industry.
“We’re long term holders in companies,” he said. “We’re the only company that can write a $1 million check or a $10 billion check. We don’t just invest in businesses that make money, but ones that can massively disrupt work, play and life. We’re not made for everybody.”
Claure said the Opportunity Fund itself is moving to Miami to be run alongside SoftBank’s $5 billion Latin America fund. It is among the largest funds in the world dedicated to supporting Black, Latinx, and Native American founders, and has invested in nearly 30 companies since its creation last year.
“I was frustrated that most of our investments basically went to U.S. and basically to white males, Indians, and Chinese, and very little going to Black or Hispanic entrepreneurs,” Claure said.
Studies and experience show that those entrepreneurs tend to identify with investors of color — and vice-versa, he said.
“It’s much easier, when you’re developing a product for Blacks or Hispanics to have someone who understands the value proposition a little bit better,” Claure said.
In the next 30 days, SoftBank plans to announce the opening of its own, larger office in Miami. The space, as much as 100,000 square feet, would house executives and employees for both the Opportunity Fund and Claure’s SoftBank International Group, which will also being consolidated in Miami, Claure said. He jokes that while he’s “not too happy” about having more competition from other venture capitalists, like Founders Fund, that are now moving into Miami.
“You haven’t seen anything else like this in the world, it’s like a gold rush,” he said. “This is now where everyone wants to come. We want to make sure we’re creating and providing the capital, talent and resources these companies need to keep going and be successful.”