New York-based Rent the Runway, the company that is known for creating dynamic ownership and clothing rental as a utility in women’s lives, announced it raised $125 million in funding co-led by Franklin Templeton Investments and Bain Capital Ventures. This round of funding values Rent the Runway at $1 billion — which is known as a “unicorn” in investment terms.
Funds and accounts advised by T. Rowe Price Associates and Hamilton Lane Advisors, on behalf of New York State Common Retirement Fund, participated as new investors.
All of the existing lead investors also reinvested in this round. J.P. Morgan served as the sole placement agent on the deal.
This is the largest round of funding that Rent the Runway raised to date. And it brings the total equity raised to approximately $337 million since launching — which positions the female-founded and female-led company to scale its rapidly growing subscription service and proprietary reverse logistics technology.
Rent the Runway is transforming the way that modern women dress and the company is disrupting the $2.4 trillion global fashion industry by enabling women to rent rather than buy clothing. Recently, Rent the Runway announced a partnership with West Elm where subscribers can rent bundles of pillows and quilts.
Founded in 2009 by CEO Jennifer Hyman and head of business development Jennifer Fleiss, Rent the Runway is transforming the way that modern women dress and the company is disrupting the $2.4 trillion global fashion industry by enabling women to rent rather than buy clothing. Rent the Runway believes that women everywhere will soon have a fashion subscription.
“Shared, dynamic ownership is a movement that Rent the Runway has pioneered over the last decade and we’re excited to continue to lead the market and innovate our subscription service,” said Hyman.
Currently, Rent the Runway carries apparel, accessories, and home decor from over 600 designer partners. The company also has five retail stores, 11 million community members, and 1,800 employees, “all of whom have equal benefits across the organization, 93% of whom are female and/or non-white, with 80% of leaders who are women.”
In conjunction with this funding round, Franklin Templeton Research Analyst and Portfolio Manager Sara Araghi has been appointed to Rent the Runway’s board of directors. This makes her the fifth woman on the company’s board of directors.
“The apparel and accessories market is one of the largest consumer markets, and Rent the Runway is a truly disruptive force that will continue to create massive opportunities for consumers to live a more sustainable and cost-effective life,” added Araghi.
With this round of funding, it will enable Rent the Runway to accelerate its unique subscription service and continue innovating its proprietary technology and infrastructure. The areas of investment focus include subscription growth, assortment expansion, and infrastructure.
Rent the Runway’s subscription business grew 160% year-over-year and the company saw huge adoption of its Unlimited service by a growing number of working women. In terms of assortment expansion, the company is going to broaden its assortment and category offerings to serve all parts of customers’ lives including the closet, home, and beyond. For infrastructure, Rent the Runway is going to expand its proprietary reverse logistics operations and technology with an immediate focus on its anticipated second fulfillment facility opening in Dallas, Texas within the next few months.
“Rent the Runway has consistently demonstrated an ability to innovate and improve its customer experience and technology. We believe RTR is at the leading edge of driving change in the fashion industry as consumers shift to wanting access, not necessarily ownership, even in apparel,” T. Rowe Price Associates Equity Research Analyst Ashley Woodruff commented.
