Just weeks after opening its flagship store in Manhattan, fashion retailer Rent the Runway has announced a $60 million funding round led by Fidelity Management and Research Company. The round includes contributions from existing investors Technology Crossover Ventures, Bain Capital Ventures, Highland Capital Partners, and Advance Publications, Inc.
With the latest round, Rent the Runway has procured more than $190 million in venture capital investment. The brand’s new undisclosed valuation represents a “significant step up” from the $520 million valuation it earned when it raised a $60 million round in 2014, according to Co-founder and CEO Jennifer Hyman in an interview with Recode.
Hyman told Recode that the company is profitable in 2016, which likely helped convince the Fidelity team to lead the latest round. TechCrunch obtained documents from 2015 revealing that the company forecasted $121 million in revenue for 2016, well up from $44 million in 2014.
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Rent the Runway plans to use the funding in four key areas:
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Scaling its a la carte rental service, which now includes 6 million+ members throughout the U.S.;
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Growing its Unlimited subscription business, which launched in Spring 2016 and gives women access to $40,000 worth of designer clothing per year for a fixed monthly price;
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Expanding its retail footprint, currently operating stores in six cities, including San Francisco, where the company recently opened a store within a Neiman Marcus’location; and
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Improving its operational capacity, which includes its reverse logistics platform.
