Rent the Runway earns unicorn status with new valuation
Fashion rental giant Rent the Runway is now valued at $1 billion, thanks to a new financing round.
Rent the Runway has obtained a $125 million investment that brings the company’s total valuation to $1 billion, making it colloquially known as a “unicorn” startup. The investment was co-led by Franklin Templeton Investments and Bain Capital Ventures. The new financing is the largest funding round Rent the Runway has raised to date, and brings total equity raised to approximately $337 million.
The new funding comes on the heels of a recently announced partnership between Rent the Runway and West Elm that will allow Rent the Runway subscribers to rent pillows, duvets and other products from the home furnishings retailer.
According to Rent the Runway, the new capital will enable the company to accelerate its operations in a number of areas. These include scaling of its subscription business, which grew 160% year-over-year in 2018, and a broadening of its assortment and category offerings.
In addition, Rent the Runway intends to expand its proprietary reverse logistics operations and technology, with an immediate focus on its anticipated second fulfillment facility opening in Texas this spring.
“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 Jennifer Hyman, co-founder and CEO of Rent the Runway.
In tandem with the investment, Sara Araghi, research analyst and portfolio manager at Franklin Templeton, has been appointed to Rent the Runway’s board of directors, making her the fifth woman on the board.
Rent the Runway carries apparel, accessories and home decor from over 600 designer partners and has built in-house proprietary technology and a reverse logistics operation. The company operates an e-commerce platform and five retail stores, and has 11 million community members.