Inside Eight Sleep | Using AI to Sleep Better | CEO Matteo Franceschetti

Welcome back to The Peel. I’m Turner Novak from Banana Capital, and today I’m joined by Matteo Franceschetti, co‑founder and CEO of Eight Sleep. They built a breakout consumer health product starting in 2014, raised over three hundred million dollars, and recently reported free cash flow positive in early 2025. We get into why hardware can be a moat, how he funded a tough category, and how their AI “sleep butler” improves rest and health. New episodes drop weekly, and the back catalog is deep, including last week’s with Rahul Vora from Superhuman. Matteo, welcome.

Thanks for having me. If you’re low on sleep today, I’ve got a few ideas to help.

For anyone new to Eight Sleep, what is it, and how does it help me sleep better?

We built a smart cover that goes on any mattress and quietly regulates each side of the bed hundreds of times a night. It cools or warms in real time based on your biometrics to help you fall asleep faster, get more deep and REM, and wake up feeling sharper.

Why put sleep first in the health stack?

Sleep is the foundation under nutrition and fitness. When you sleep well, you train better and eat better; when you don’t, you crave junk and skip workouts. The lowest‑effort wins are a consistent schedule and seven to nine hours in bed.

What easy changes move the needle immediately?

Keep the same sleep and wake time daily, and start winding down before bed. It’s not the phone itself but the content; a calm chat is fine, a heated work thread is not. Set the room around 68 to 72 degrees Fahrenheit, and you’ll already feel a difference.

Temperature seems central to your system. What’s happening under the hood?

Your core cools as you fall asleep and warms near wake time, and deep sleep prefers a different temperature than REM. Our cover has sensors that infer heart rate, breathing, movement, and stages; the hub circulates water to fine‑tune temperature per side. Our AI, AutoPilot, adapts through the night, and we see users fall asleep faster and improve sleep quality by up to thirty percent. You can verify changes in our app or with your own wearable.

So it’s like a real butler constantly adjusting the environment?

Exactly, except this one reads your signals in real time. A human couldn’t see your heart rate or stage shifts without sensors and would miss the moment‑to‑moment adjustments.

What’s the sensing setup, and do I need skin contact?

The pad is thin and keeps your mattress feel. Sensors near chest level pick up signals like a high‑fidelity stethoscope. Data streams to the cloud, AutoPilot interprets it, and then the system tweaks temperature automatically.

How else are you using AI, and what have you learned from the data?

We’ve run advanced models for years. They detect metrics, recognize patterns like a late workout or alcohol, and adjust your bed that night. In the morning you get insights, and models sometimes surface health flags we weren’t seeking; one customer went to the ER on our data and had a life‑saving surgery. We’re also building digital twins to simulate long‑term behaviors and risks, and as we pull in labs or DNA, the guidance gets more precise. We treat your data as yours, use it to deliver value back, and protect privacy.

Travel ruins my sleep. Any hotel options or portable ideas?

We’ve partnered with hotels like Equinox in New York and are exploring broader placements. A portable version is possible; it’s a question of priorities, not feasibility.

We’re recording right after a big AWS outage. What happened on your end?

Some devices lost cloud features for hours. The team worked through the night to restore everything and is shipping a Bluetooth fallback so you can control the bed even if Wi‑Fi or the cloud is down. We’re adding more layers so outages don’t disrupt sleep.

What’s coming next on the product side?

On hardware, we’ll keep expanding sleep enhancement. Our adjustable base already lifts your head when snoring starts, and people love it. We want the agent to also orchestrate light, noise, air quality, and oxygen as needed. On software, the sleep agent will get its own live page with changing insights, summaries, and recommended tweaks rather than a static metric wall.

You grew up in Italy, right? How did you end up building this in the US?

I’m Italian. After selling a renewables company, I moved to New York, did a similar venture that was acquired by a Panasonic affiliate, started angel investing, and then co‑founded Eight Sleep. The first prototype was quick; scaling manufacturing was the hard part. I moved to China on a day’s notice and stayed until we could build at quality. Hardware is slow, expensive, and unforgiving, but if you push through, the defensibility is real. You need true product‑market fit to survive the long cycles.

How did you finance a tough hardware path when investors cooled on the category?

We started with family and friends, got rejected by YC twice, then got in and raised quickly. After the Nest halo faded, many hardware startups struggled, and investors pulled back. We did a modest A, then brought in Khosla Ventures and Founders Fund because they already believed sleep could be a massive market and needed the right team. Later Valor joined, and we’ve raised roughly a quarter to three hundred million total. The unlock was finding partners who believed the category existed; then I only had to prove we were the team to win it.

To people who say it’s just a mattress, what’s your case for the category?

We’re not a mattress; we’re a system that does the work for you. You spend a third of life asleep, and eight hours is like flying New York to Milan every night. Upgrading that experience for roughly a couple dollars a day is rational. The last big mattress innovation was memory foam from the space era; meanwhile phones got smart and sleep stayed dumb. We’re changing that and will make it more affordable over time.

Was hiring hard for a mission like this?

Great people want to work on meaningful health tech that actually acts on your data, not just reports it. Many candidates already use the product, love it, and reach out. We’re intense and mission‑driven, so alignment matters.

I saw you launched supplements, including for jet lag. What’s the approach?

I travel constantly, so we built a gentle nighttime line and a jet lag protocol with Peter Attia. The jet lag stack includes melatonin with a tapering dose over the first nights in a new time zone, plus app guidance on light, meals, and activity. It’s simple and effective.

Are you building more for women’s health?

Yes. We help with hot flashes in menopause by cooling quickly, and we’re designing programs for pregnancy as physiology shifts. The adjustable base helps with comfort and even middle‑of‑the‑night feeding. We also see demand from cancer patients dealing with treatment‑related hot flashes. Those notes from people who can finally sleep again mean everything.

Why add a subscription on top of the hardware?

The intelligence runs in the cloud, which has real compute costs. That’s what enables advanced biometrics, insights, and a 24‑7 agent adjusting your bed. Retention is excellent, which tells us the value is there for roughly a dollar a night for two people.

What’s your personal health routine look like?

I’m strict. I fast, eat lightly before dinner, train daily, play paddle competitively, do ice baths every day, and hit the sauna a few times a week. I keep carbs low except a weekly pizza night, and I track recovery closely so I can lead like an athlete.

You also race cars. How demanding is that?

It’s intensely physical and mental. Braking forces can feel like pressing with a one‑leg squat over and over, cockpits run over one hundred degrees Fahrenheit, and performance is decided in tenths of a second. If fatigue slows you slightly, you fall off pace fast. I love it.

This was fun. Thanks for coming on.

Thank you. Great conversation.

If you enjoyed this, check out last week’s episode with Rahul Vora on building and selling Superhuman. Like, comment, and subscribe, and feel free to name your sleep butler after me. Join our newsletter, The Split, to get each episode and full transcript in your inbox. Thanks for listening, and see you next time.