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Sleep-Focused Supermoon Capital Raises $36 Million To Fund The ‘Night Market’

This article is more than 2 years old.

When Pat Connolly was approaching the end of his 40-year career in business development and marketing at Williams-Sonoma, he met the folks behind ResMed, a company that creates products to help people with sleep apnea. They talked about how many people in the world were not sleeping soundly; it got Connolly thinking about his own relationship to sleep. “I also realized that I was not sleeping well,” Connolly tells Forbes. “I always believed you could sleep when you're dead. I was drinking a lot of coffee in the afternoon and waking up in the middle of the night and taking an Ambien. It really got me thinking about my own health.”

Seeing how ResMed was growing, Connolly recognized an investment opportunity. When he retired from Williams-Sonoma in 2016, the idea had stuck. In 2019 he launched Supermoon Capital with Mike Masterson and Grayson Judge — both bringing years of advisory experience — to tap into a budding trillion-dollar market they dubbed the “night market.”

 “Unfortunately many of the products currently on the market are unscientific, unproven or even unhealthy,” Connolly says about existing sleep solutions. “People are increasingly demanding science based-solutions, not just marketing.” 

Supermoon Capital raises $36 million for its debut fund from a limited partner base including family offices, high net worth individuals and some strategic backers like the inspiration for the fund, ResMed. The firm will focus on early-stage opportunities — pre-seed through Series A — and plans to invest in 13 to 15 companies from this capital batch. The firm may also look to incubate companies in-house if the right ideas or resources arise. “There is a huge need for a fund focused entirely on sleep,” Masterson says. “It’s truly the most important aspect of everyone’s daily lives. However, sleep science is really early and highly complex. We are able to serve as the bridge in-between.” 

Supermoon is sector agnostic, Judge says, due to the fact that sleep — and the night market — touch so many aspects of life, from physical products like beds and sheets to medical diagnostics and treatments for conditions like sleep apnea. The firm is also interested in AI and enterprise-driven tech solutions to solve sleep problems, too. Supermoon has backed six companies thus far, including Tel Aviv-based Clair Labs, which creates a device that can monitor a patient’s sleep remotely, and EnsoData, a Madison, Wisconsin-based company that uses AI to help people with sleep apnea. 

The firm plans to pull from a network it’s built that includes sleep scientists and experts to evaluate potential investments and help portfolio companies to test products and get feedback. “We are pretty excited about the arsenal that we’ve assembled and how it creates a lot of differential value-add,” Masterson says. “It makes us quite attractive as a co-investor, as more generalist funds might be starting to look at sleep as a major investment opportunity.” Chris Fernandez agrees. The cofounder and CEO of EnsoData says he was thrilled to be able to work with a firm that had expertise in sleep and has been able to tap this network for help with studies and customer introductions. “It means a lot to have a venture fund completely focused on sleep,” Fernandez tells Forbes. “It brings a lot of validation. We collectively are at the beginning of our journey of really uncovering the real influence of sleep on human health and disease.”  

The Supermoon team thinks that such possibilities in the night market will only continue to grow, especially after talk about the connection between sleep and immune health has increased during the pandemic. Connolly adds that the firm has looked at several hundred companies so far, across the globe. After years of investment dollars flowing to ways to make being awake more enjoyable, Judge argues it’s time for the same to happen with sleep. “They used to say that the practice of medicine ended when the patient fell asleep,” Judge says. “All of that is flipping on its head and we are becoming aware of ourselves, our health and wellness. We really want to reunite our chronically fatigued world and enhance lives as we do it.”

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