Rent the Runway, the Web site for renting designer dresses and accessories that launched in November 2009, has received $15 million in venture capital funding from Kleiner Perkins Caufield & Byers.
This story first appeared in the May 23, 2011 issue of WWD. Subscribe Today.
Aileen Lee, partner at Kleiner Perkins, joins the Rent the Runway board.
According to Jennifer Hyman, co-founder and chief executive officer, the latest round of fund-raising has resulted in an aggregate of $31.7 million from investors. Bain Capital provided $1.7 million in seed money, and then invested another $5 million in early stage funding. Highland Capital is also an early stage investor at $10 million.
Hyman said although the firm has been profitable for several months, it is using some of that cash flow plus the new investment to grow via infrastructure and technological initiatives.
“We’re ready to scale the business and open warehouses around the country to get inventory to women with increased efficiency,” she said.
The firm launched with 25 brands and that number is now 140. The site has expanded from just dresses to include accessories, and it sells hosiery and intimates. The firm uses proprietary algorithms to personalize the shopping experience of each member.
According to Hyman, its membership reached 1 million earlier this month, and the firm is on track to hit over $20 million in sales in 2011.