Rent the Runway has raised $60 million in a Series D round of financing to help fund its expansion of brick-and-mortar as well as engineering staff.
This story first appeared in the December 22, 2014 issue of WWD. Subscribe Today.
The Web site has raised a total of $116 million so far. Its last round of funding was in March 2013.
The latest round was led by Technology Crossover Ventures, with participation from Bain Capital Ventures, Highland Capital Partners and Advance Publications, parent of Condé Nast. Bain, Highland and Advance are existing investors. Technology Crossover is a new investor in the site.
As part of the funding, Technology Crossover’s Daniel O’Keefe, a general partner at the venture capital firm, will join Rent the Runway’s board. O’Keefe said the company has “given a whole new generation of women access to high-end fashion” and that his firm is “looking forward to helping the company grow.”
The venture capital firm’s portfolio of investments includes online men’s skin-care e-commerce firm Dollar Shave Club; online bags and accessories company eBags; Facebook; online shoe site JustFabulous; Netflix and Spotify.
Jennifer Hyman, Rent the Runway’s cofounder and chief executive officer, said the company this year unveiled Unlimited, its new subscription service. In addition, “we opened new retail stores in New York and Washington, D.C., and we doubled our customer base,” she said.
The funding will be used to accelerate the company’s growth. Plans include opening more retail locations across 15 key markets, opening a West Coast distribution center and adding to its engineering staff.
At WWD’s CEO Summit in October, Hyman said the company has rented dresses and accessories equivalent to $300 million in retail value. She estimated that amount will reach about $600 million by the end of this year, not including the Unlimited business that rolled out this summer.
She also said it took just one month to open its first retail door in Manhattan, on West 18th Street, from the time cofounder Jennifer Fleiss identified the space. “That’s how quickly we want to open things….We’re taking data and iterating it and not being afraid of what the consequence will be. Often people paralyze themselves with too much strategy and not enough execution,” she told attendees, emphasizing that her company is a technology company first.
The retail locations are essentially showrooms in which customers can try on dresses and accessories. They also can book appointments with the company’s stylists to discuss fit and style.
According to Hyman, the company has stylists who use personalization algorithms to select options that a client will like after her first one-on-one appointment at Rent the Runway. About 65 percent of the retail location’s space is devoted to the dressing-room experience, and store associates can tap into a consumer’s information, such as past rentals and products she has “loved” on the site as well as key measurements on file for height, chest size and weight.
The fashion site began in November 2009 for consumers seeking to rent designer outfits. The site now has rental options for various accessory categories.