Target  (TGT) - Get Report will opt for a minority stake in mattress startup Casper Sleep after the two sides failed to come to an agreement on an outright purchase, sources told Recode Friday. 

Target had offered $1 billion to buy the company, but the two sides failed to close the deal. 

Casper, which was valued at $550 million following its last private investment in 2015, generated $200 million in sales in 2016. 

Last week, Target announced that it will start selling Casper mattresses and bedding through its website as well as in its 35 stores that are located near college campuses. 

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