ChiliSleep merges with Ebb

ChiliSleep merges with Ebb Therapeutics and gets a $37 million injection

When it comes to the science of sleep, things can be downright confusing. There are so many different structures in the brain—from the hypothalamus to the pineal gland—and each has a unique effect on sleep.

Luckily for us, there are smart people and companies studying the brain’s functions in depth so we don’t have to. And two of those companies—ChiliSleep and Ebb Therapeutics—just merged to expand their research in multiple areas.

ChiliSleep creates products that help regulate body temperature during sleep. Started by Tara and Todd Youngblood (whose uncle invented the waterbed 51 years ago), the company was officially founded after the couple lost their six-month-old son, leaving Tara unable to sleep. Having already been in the sleep industry for several years and not being able to find a solution for a good night’s sleep, the Youngbloods took it upon themselves to fix the problem. They also found that there was a bigger opportunity there, and thus ChiliSleep was born.

Ebb Therapeutics was founded by Restmed—the same company that created obstructive sleep apnea machines. Their original vision was to work with insomnia, but unfortunately, there’s a payer problem when it comes to insomnia and our medical system. 

Treatment for insomnia is a consumer spend, not a medical spend, meaning healthcare, medicare, and Medicaid cannot be used. This caused Ebb to look for direct-to-consumer opportunities, which is what created synergy between Ebb and ChiliSleep.

KKR, a major investor in Ebb, put $37 million behind the merger. And for good reason.

“Ebb has some really exciting tech, and they’ve worked for quite a while to identify great opportunities for how temperature really impacts the sleep state,” Todd says. “We’ve been focused on a whole different area of the brain, which is what happens with temperature once you fall asleep. Ebb’s approach was starting with pre-sleep, like insomnia, and then using temperature modulations once people are asleep to help them stay asleep.”

The main part of their collective business, according to Todd, is taking the approach that sleep is all about the individual. It’s not about what one company wants to tell all individuals about how all people can sleep better. “If I don’t understand how you sleep and what you need to do to improve your sleep and what habits you do throughout the day, there’s no way I can recommend an effective sleep strategy for you,” Todd explains. “Can you imagine if there was only one diet? So why do we think that’s an acceptable approach for sleep?”

It’s still early in the process, but Todd says one of the next steps is going to be changing the dialogue around sleep so people understand that sleep is fixable. He compares it to people who wanted to lose weight but didn’t know of a solid way to do it until a certain diet became popular. Once they dropped everything the diet suggested, they found their health noticeably improved.

“That’s really our approach, and we think that will help us be successful,” Todd says. “The Ebb combination, plus where we are with ChiliSleep, is bringing a holistic approach to sleep that we plan on launching in the early summer.”

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