NEW YORK--(BUSINESS WIRE)--Rent the Runway, Inc., the company that created dynamic ownership and clothing rental as an essential utility in women’s lives with the world’s first living closet, announced today a $125 million investment co-led by Franklin Templeton Investments and Bain Capital Ventures. In addition, funds and accounts advised by T. Rowe Price Associates, Inc. and Hamilton Lane Advisors, on behalf of New York State Common Retirement Fund, participated as new investors. All existing lead investors have re-invested in this round, reinforcing their belief in the success and continued growth potential of the business. J.P. Morgan acted as the sole placement agent on the deal.
This funding round values the company at $1 billion.
This financing is the largest funding round Rent the Runway has raised to date, and will bring total equity raised to approximately $337 million since inception, positioning the female-founded and female-led company to rapidly scale its disruptive and growing subscription business and proprietary reverse logistics technology.
“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.
The capital will enable Rent the Runway to dramatically accelerate its unique subscription service and continue to innovate its proprietary technology and infrastructure. Key areas of investment focus include:
- Subscription Growth: Rapidly scale Rent the Runway’s subscription business, which grew 160% YoY, and capitalize on a significant market opportunity worth an estimated $2.4 trillion, most of which goes underutilized as 80% of American women’s closets are not worn regularly. Additionally, RTR has seen huge adoption of its Unlimited service by a growing number of working women, addressing the needs of the 76 million professional women in America. Women make 85% of all consumer purchasing decisions and account for $7 trillion in consumer spending.
- Assortment Expansion: Broaden assortment and category offerings to serve all parts of customers’ lives including the closet, home and beyond.
- Infrastructure: Expand RTR’s proprietary reverse logistics operations and technology, with an immediate focus on Rent the Runway’s anticipated second fulfillment facility opening in Texas this spring.
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.
"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,” said Sara Araghi.
“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,” said Ashley Woodruff, Equity Research Analyst at T. Rowe Price Associates, Inc.
Rent the Runway answers the modern woman’s desire for constant newness by offering a rotating wardrobe that is also a smart, sustainable choice. Recognized by CNBC as the 9th most disruptive company in the world and as one of Fast Company’s Most Innovative Companies, Rent the Runway is changing the way women get dressed every day.
About Rent the Runway
Rent the Runway is transforming the way modern women get dressed and disrupting the $2.4 trillion global fashion industry by enabling women to rent, versus buy, clothing. Founded in 2009 with a vision to build the world’s first living closet, RTR believes that women everywhere will soon have a subscription to fashion. By creating a new model of dynamic ownership, RTR has made apparel rental an indispensable utility while also empowering women to feel their best every day. RTR carries apparel, accessories and home decor from over 600 designer partners and has built in-house proprietary technology and a one-of-a-kind reverse logistics operation. RTR has five retail stores of the future, 11 million community members and employs nearly 1,800 people, 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.