Rent the Runway, a US-based fashion leasing platform backed by media group Advance Publications, secured $125m in funding yesterday at a $1bn valuation.
The round was co-led by investment firm Franklin Templeton Investments and Bain Capital Ventures, part of private equity firm Bain Capital. It included certain funds and accounts advised by T. Rowe Price Associates and Hamilton Lane Advisors, which invested on behalf of the New York State Common Retirement Fund.
Founded in 2009, Rent the Runway runs an online-based service that enables women to lease clothing pieces, accessories and home decor, paying either per item or through a subscription that gives access to a set or unlimited number of items, depending on the selected price. It has 11 million registered users and also operates five retail stores.
The company will use the capital to scale its subscription business and drive further development of its logistics technology and infrastructure. Part of that growth will involve the imminent opening of a second fulfilment facility in the state of Texas.
The funding will also help Rent the Runway expand its assortment and category offerings. Sara Araghi, research analyst and portfolio manager at Franklin Templeton, has joined its board of directors in connection with the round.
Rent the Runway has raised approximately $337m altogether, it said. Advance Publications contributed to a $60m series E round led by financial services and investment group Fidelity Management and Research Company in 2016.
The series E round also featured Bain Capital Ventures, Technology Crossover Ventures and Highland Capital Partners, the same three investors that had joined Advance Publications in the company’s $60m series D round in 2014.
Advance Publications first backed Rent the Runway in 2013 when it led a $24.4m series C round that also featured payment services firm American Express and Novel TMT Ventures, which invests on behalf of diversified holding company Novel Group.
Bain Capital Ventures, Highland Capital Partners and Kleiner Perkins Caufield & Byers also took part in the series C round. Rent the Runway’s earlier investors include Blue Pool Capital, which injected $20m in March 2018.
– Photo courtesy of Rent the Runway.
