Rent the Runway raises $60 million to ramp up expansion
December 27, 2016 04:40 PM
Fashion e-retailer Rent the Runway Inc. has added a lavish $60 million funding round to its closet.
Rent the Runway’s latest round was led by Fidelity Investments. This is the second $60 million funding round raised by the women’s designer apparel rental e-retailer, No. 236 in the Internet Retailer 2016 Top 500 Guide, in the past two years. In December 2014, the e-retailer announced a $60 million funding round led by investment firm Technology Crossover Ventures. The newest round brings the total raised by Rent the Runway to $174.4 million over six rounds, according to CrunchBase.
Rent the Runway will spend the money to build out its luxury rental subscription service called Unlimited, which launched in March and costs shoppers $139 per month to rent three high-end clothing items for an unlimited amount of time. The funding also will go toward improving Rent the Runway’s logistics and its flagship rental offering, as well as growing its offline business.
The company began its offline expansion in 2012 with the opening of a pop-up shop in Los Angeles. Since then it has opened permanent locations in six cities including Chicago, Los Angeles and New York. Last month, Rent the Runway opened a location inside of luxury retail chain Neiman Marcus’ (No. 36) San Francisco store.
"We are coming off of our most successful year since the company's inception, with the launch of our Unlimited subscription business, our partnership with Neiman Marcus and our new flagship store in New York," CEO Jennifer Hyman said in a statement announcing the funding.
According to Top500Guide.com, Rent the Runway had Internet Retailer-estimated online sales of $112.1 million in 2015, up 40% from $80.1 million in 2014.
Fidelity, lead investor in Rent the Runway’s most recent funding, also was the lead investor in Jet.com’s $500 million funding round in November 2015 and online meal delivery service Blue Apron Inc.’s (No. 231) $135 million round in June 2015. Wal-Mart Stores Inc. (No. 4) in August bought Jet for $3.3 billion.