Eight Sleep raised $100 million in a Series D round in August 2025, led by HSG (HealthSpan Growth), bringing total funding to approximately $260 million. The round included participation from existing investors Valor Equity Partners and Founders Fund, as well as individual backers such as Formula 1 drivers Charles Leclerc and Zak Brown and comedian Kevin Hart.

Investors across all funding rounds include Y Combinator, SoftBank Vision Fund, Khosla Ventures, General Catalyst, and Founders Fund.

Eight Sleep is a smart mattress system that regulates bed temperature and tracks sleep biometrics without requiring wearables. The product includes a thin cover that fits over existing mattresses, incorporating water tubes and embedded sensors connected to a bedside Hub unit that circulates heated or cooled water through the system.

Users create individual Autopilot profiles in the Eight Sleep app by inputting preferences for bedtime temperature, wake time, and personal data such as age and menstrual cycles. The system adjusts water temperature continuously throughout the night, maintaining a range of 55-110°F based on sleep stages to keep users within their optimal thermal zone. Embedded sensors monitor heart rate, heart rate variability, breathing rate, and movement without the need for wearable devices.

The Pod 4 and Pod 4 Ultra models include additional features such as GentleRise vibration wake-up, snoring detection with automatic head elevation, and dual-zone temperature control for couples. Each morning, users receive a Sleep Fitness Score and detailed analytics, which can sync with fitness platforms including Apple Health, Strava, and TrainingPeaks. Over time, the system uses AI to analyze individual sleep patterns and adjust conditions to support recovery.

Eight Sleep operates a B2C hardware-plus-subscription model that integrates premium mattress accessories with ongoing software services. The company sells Pod systems directly to consumers through its website, with prices ranging from $2,500 for the basic Pod 4 to over $4,000 for the Pod 4 Ultra with an adjustable base.

The recurring revenue component is driven by the required Autopilot membership, priced at $15-19 per month. This subscription provides AI-powered sleep optimization, detailed analytics, and continuous software updates. The model creates a razor-and-blade dynamic, where hardware sales facilitate customer acquisition, and subscriptions generate ongoing revenue while increasing switching costs.

Eight Sleep manufactures its products in Shenzhen, China, which provides cost advantages and supply chain control. The company has also expanded into corporate wellness programs, partnering with sports teams and tech companies to offer team-level recovery dashboards. Additionally, its move into HSA/FSA eligibility through partnerships such as Truemed effectively offers customers a 30% discount and opens new distribution channels via employers and healthcare payers.

Sleep Number leads the premium smart mattress category with its Climate360 and ClimateCool systems, priced at $10,000–$12,000, approximately two to three times higher than Eight Sleep. The company operates over 650 retail stores and maintains healthcare partnerships to enhance brand credibility, integrating temperature regulation into its broader SleepIQ platform. While Sleep Number's algorithm performance and app stability are less advanced than Eight Sleep's, its extensive retail presence and white-glove delivery service provide competitive advantages in accessing mainstream consumers.

Tempur-Pedic and Serta have incorporated phase-change cooling foams and optional sleep tracking modules into their traditional mattresses. These companies primarily compete on their nationwide retail networks and established brand trust but lack active cooling capabilities comparable to Eight Sleep's water-based system.

Sleep.me offers water-based cooling systems similar to Eight Sleep through products such as ChiliPad and Dock Pro, marketed as one-time hardware purchases without subscription requirements. These systems have a slightly narrower temperature range and lack integrated biometric sensors, requiring users to rely on third-party wearables. Sleep.me competes on price, with products ranging from $800 to $1,800, and positions itself against subscription-based models.

BedJet employs forced air systems instead of water cooling, which simplifies global certification and reduces manufacturing costs. However, this approach does not provide granular zone control and has received user complaints regarding noise and moisture removal. BedJet targets Eight Sleep's customer base through influencer marketing and Reddit communities, emphasizing lower upfront costs.

Emerging competitors are addressing specific segments of Eight Sleep's market. Companies focused on menopause and hormonal health are developing temperature regulation solutions tailored to hot flashes, while others target athletes and biohackers with advanced recovery metrics. These specialized players often lack Eight Sleep's broad consumer appeal but provide deeper functionality for niche use cases.

Eight Sleep is expanding its offerings from temperature control to broader sleep optimization through its AI Sleep Agent platform. This system generates digital twins of individual users to forecast recovery needs and deliver tailored interventions, such as temperature adjustments, elevation changes, and breathing prompts. By transitioning from passive tracking to active intervention, Eight Sleep shifts its focus toward becoming a software-driven platform with higher-margin potential, rather than solely a hardware provider.

The company has introduced condition-specific features, including Hot Flash Mode, which addresses the needs of the 1.1 billion women projected to experience menopause by 2030. It is also developing additional health monitoring capabilities, such as sleep apnea detection and cardiac monitoring, for FDA submission. These advancements could enable access to reimbursement pathways and clinical-grade market segments.

Eight Sleep is expanding its customer base beyond individual consumers into B2B markets through corporate wellness programs and partnerships with sports teams. Professional sports organizations, including Formula 1 and MLB teams, utilize Pod systems to create team-level recovery dashboards, presenting opportunities for enterprise-focused recurring revenue models.

The partnership with Truemed allows customers to use HSA/FSA funds for purchases, effectively reducing costs by 30% and facilitating entry into employer benefits programs. This healthcare-oriented positioning, combined with biometric accuracy, creates potential for collaborations with telehealth providers and integration into remote patient monitoring initiatives.

Eight Sleep currently ships to over 30 countries and identifies significant growth potential in Asia, particularly among China's 400 million middle-class consumers. Its Shenzhen manufacturing base offers cost efficiencies and regulatory familiarity, supporting broader expansion across the APAC region. High urban air conditioning penetration in major Chinese cities further supports the adoption of temperature-controlled bedding.

The company is also pursuing partnerships with local healthcare systems and employers in key international markets. Its global provider network enables it to serve multinational corporations that prioritize consolidated vendors over regional specialists.

Hardware dependence: Eight Sleep's reliance on high-cost hardware sales for customer acquisition introduces inventory risk and constrains gross margins relative to software-only businesses. Delays in manufacturing, component shortages, or quality control failures could materially affect revenue growth and customer satisfaction.

Subscription churn: The mandatory monthly subscription introduces friction for customers who may perceive sleep tracking as a non-essential service. If a significant number of customers cancel subscriptions while retaining the hardware, Eight Sleep's unit economics and long-term value proposition could weaken substantially.

Competitive commoditization: Temperature regulation and sleep tracking are increasingly offered as standard features in mattresses from established players such as Sleep Number and Tempur-Pedic. This trend risks eroding Eight Sleep's differentiation, as larger competitors with extensive retail networks and strong brand equity may gain market share by offering lower-cost integrated solutions.