To be successful in the tech market, or any market, being at the right place at the right time is essential. This concerns not only the startup team but also the potential customers and the market situation. There are two paths you can take on the way to find the right alignment of all these factors: sticking with one place long enough until the right time arrives, or figuring out the next place that the right time will most likely be.
Sleepace, a Shenzhen-based startup for sleep quality monitoring, chose the first path. In 2014 when TechNode first talked with company CEO and founder David Huang, the startup had just launched their medical-grade sleep tracker RestOn for people with sleep problems. This was after they had tried (failed) to target the pre-mature infant and geriatric verticals
“Sleepace have developed sleep trackers for babies and elderlies in 2013,” Huang says. “We still think they are good products, but it’s difficult to get accepted by the market back then when the customers has yet to know the concept of sleep tech.”
But what seemed almost impossible back then is now gaining momentum against the backdrop of different user habits and market landscape.
A more sleep quality aware China
38 percent of Chinese suffer from sleeping disorders, but Chinese people don’t think its a big problem until recently, but that is gradually changing.
A consumption upgrade is driving China’s economy, mainly propelled by more affluent Chinese people who are seeking healthier lifestyles, Huang told TechNode. Along with this trend, Chinese users are paying more attention to their sleep quality. The combined effect of changing customer habits, the popularity of smart hardware as well as an evolution in technology is pushing the market forward.
The huge market potential has attracted a roster of big names to the sector, Huang noted. Samsung has invested in EarlySense, whose contact-free monitoring solution powers Sumsung’s SleepSense. Apple bought Beddit and Nokia acquired health and fitness focused gadget maker Withings.
Apart from internet giants, traditional mattress makers, like Simmons are also laying out in the sector with launch of mattresses with sleep monitoring features. Sleeping quality service is forming a trillion RMB market in China, according to Huang.
Varied product line for diversified user groups
“People from different ages and gender groups may attribute their sleeping problems to different factors. Everything from environmental, physical or physiological factors may lead to sleeping disorders to different extents. So we decided to go in different verticals again in a bid to solve sleeping problems more specifically,” Huang explained.
Over years of development, Sleepace has diversified its product line. Its consumer-focused products now fall into two categories. Sleep monitoring and tracking products include RestOn, Sleep Dot, a mini smart sleep gadget, and smart pillow.
The sleep facilitation category mainly consists of Nox, a smart light/speaker that helps users to fall asleep by using its light and sound programs. In addition to app control, you can control various functions of this device by using hand gestures. Nox now offers different versions for kids and women offering custom contents from the Sleepace as well as content partner Ximalaya, an audio streaming service.
Enterprise-facing businesses offer bedding solutions for hotels and nursery homes.
Sleepace’s smart devices are now on sale in over 30 countries. “We have registered over 1 million users from around the world. In 2016, around 60 percent came from China and 40 percent from North America and Europe. This year the market share is expected to be half and half,” Huang told us. “Most of our Chinese users are people aged between 30 to 50, while overseas customers tend to be older.”
The company is expected to record profits this year, mainly from sales of hardware, Huang disclosed.
Ensuring long-term engagement
Smart hardware, particularly fitness wearables, fail to keep the interest of users for more than a few months. Huang acknowledged that Sleepace is facing the same problem.
“Unless it’s computer or smartphone, every product will face this problem. We try to attract and keep users by providing premium content and services, including courses on meditation, yoga, and more.” said Huang.
Sleepace just received RMB 50 million (~$7.37 million) Series B Plus led by Xingwang Investment and followed by Ximalaya FM. The financing comes after an RMB 40 million Series B from Luolai Home Textile, a leading home textile product brand in China, and JD.com