The investment follows reports earlier this week saying that the Minneapolis-based retailer had failed to come to an agreement on an outright purchase of Casper.
Target had offered $1 billion to buy the company.
Casper, valued at $550 million following its last private investment in 2015, generated $200 million in sales in 2016.
Shares of Target were higher during midday trading on Thursday.
Stocks have rebounded following a sharp sell off last week. Jim Cramer believes the rebound is real and gives investors advice on how to play the market going forward.