Rent the Runway raises $125m in new funding round
Rent the Runway, an online service that provides options of renting designer dresses and accessories for women, has raised $125 million in a new investment round that was led jointly by Franklin Templeton Investments and Brian Capital Ventures.
Hamilton Lane Advisors, on behalf of New York State Common Retirement Fund, and Funds and accounts advised by T. Rowe Price Associates, took part as new investors in the funding round.
This is the highest funding round for Rent the Runway till date with its existing lead investors also injecting fresh capital in the company.
The designer dresses rental company, which has raised a total of around $337 million till date, is now valued at $1 billion following the latest funding round.
Ashley Woodruff – Equity Research Analyst at T. Rowe Price Associates said: “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.”
Funds from the new investment round are expected to help the company to effectively grow its subscription service and continue to develop its technology and infrastructure. The designer dresses rental service will focus on key areas like subscription growth, assortment expansion, and infrastructure.
Jennifer Hyman – Co-Founder, and CEO of Rent the Runway said: “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.”
Jennifer Hyman, Rent the Runway Co-Founder and CEO. Photo courtesy of Business Wire)
Rent the Runway is set to open a second fulfillment center in Texas, a macro-store in San Francisco and a technological center to be located in Ireland in the next few months.
The designer dresses rental company also plans to increase its drop box service by more than a hundred in 2019. The drop box service offers lockers to facilitate returns from customers.
In line with the new investment, Sara Araghi, Research Analyst and Portfolio Manager at Franklin Templeton, has been appointed to the board of directors of Rent the Runway.
Sara Aragh said: “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.”