Bedding startups declare war on thread counts by Erin Griffith @FortuneMagazine June 8, 2015, 8:24 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons A new class of entrepreneurs want you to know that linen thread count really doesn’t matter. To hear them tell it, the idea of equating a bedsheet’s thread count with quality is a marketing gimmick created by the Big Bedding Industry to charge higher prices for cheap, low-quality sheets. Ariel Kaye learned the truth about linens while researching what bed sheets to buy (turns out it’s the caliber of a thread matters more than the count.) She was also surprised to find that the home textiles industry, a $22 billion market according to Home and Textiles Today, has little brand loyalty and no true brand leader. So in 2013, she went to Italy, found an 80-year-old, family-run textile factory to produce high-quality sheets and launched Parachute Home (a Los Angeles-based startup that sells bedding online). Last year the company did $1 million in sales via its website. Recently it announced $3.8 million in new venture funding from Upfront Ventures, with participation from Daher Capital, Queensbridge Venture Partners, Mesa+, and Joanne Wilson. By selling directly from its website, Parachute cuts out the middleman and offers consumers a lower price than what brick-and-mortar retailers charge for their high-quality sheets. The company is a “luxury bedding basics brand born out of the idea that you should not have to spend a ton of money on a sheet set,” says Kaye. Parachute is one of a growing number of startups that are aiming to capitalize on the e-bedding market gap. Startup Brooklinen did more than $1 million in sales in 2014, its first year. Demand was so high that the company was only able to keep inventory in stock for seven out of the first 12 months in business. Vero Linens, an Italy-based exporter of luxury linens, began selling its sheets directly to customers online after a drop in cotton prices cut into the company’s margins, while New-Jersey based Boll & Branch launched its e-commerce business in early 2014. (You could argue that the notorious founders of Genius, née RapGenius, were ahead of their time with their first failed startup, Bombsheets.com, a site for “bomb-ass” bed sheets.) So, why are entrepreneurs flocking to the market now? Scott Tannen, CEO of Boll & Branch, cites two trends: the Internet, and affordable luxury products. The first one is obvious: Claims about superior products can easily be rebutted with a quick Google search on one’s phone. “Each time we let consumers in on the dirty secrets of bedding—like Egyptian cotton is the name of a plant grown in Pakistan or China and thread count doesn’t matter—there is a tremendous amount of information that backs it up,” Tannen says. Brooklinen makes the same case. Until now, consumers were given two options, notes a company spokesperson: luxury sheets that cost $500 or more, or cheaper sets from big box stores that promise 1500 thread counts, “but feel like sandpaper.” High-end sheet sets from Parachute Home start at $89, Boll & Branch sheets cost $200, and Brooklinen sells its linens for $99 and up. Tannen also believes people are also more willing to spend money on themselves today, especially when the Internet enables retailers to slash prices on luxury items. “Consumers are realizing that money spent on themselves is money well-spent at much younger ages than ever before.” Like other startups, Brooklinen is able to offer consumers lower prices because it doesn’t have to pay fees for “slotting” on store shelves, licensing from brand names like Calvin Klein, or distribution. The bedsheet startup trend follows a boom in direct-to-consumer mattress startups, such as Tuft and Needle, Leesa, and Casper, which Fortune recently reported is raising funding at a $500 million valuation. Casper is also on track to do $75 million in sales this year. Fast-growing startups Casper and Parachute have found success by using content marketing to their advantage and riding the coattails of a public shift toward better sleep health. Casper recently hired the former editor-in-chief of the New York Press to launch a digital publication related to sleep and Parachute produces a blog with content about everything from sleep tips to reviews of sleep trackers.