Rent the Runway has achieved unicorn status. On Thursday, the female-founded startup launched by Jennifer Hyman and Jennifer Fleiss in 2009 announced a $125 million Series F funding led by Bain Capital Ventures with participation from asset management firm Franklin Templeton Investments and T. Rowe Price Associates, Inc., bringing the company's total investment to $337 million. This new funding values the company at a whopping $1 billion.
The fresh injection of capital marks a milestone for the company, which has been working for years to expand its business beyond formal dress rentals. In 2016, RTR introduced a subscription service for everyday clothing and accessories that has developed a large customer base among professional women. Recently, the company expanded into home decor by partnering with West Elm to allow subscribers to rent pillows and throws. And back in January, RTR announced that it would start producing exclusive clothing in partnership with Derek Lam, Prabal Gurung and Jason Wu.
The rental platform will use the new capital to grow its subscription business, which offers unlimited rentals and now makes up 60 percent of its revenue. The service costs $159 a month and allows customers to rent up to four items at a time. It will also use its latest funding to broaden its assortment and category offerings to serve all parts of customers' lives, including the closet, home and beyond.
"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," said Hyman, the co-founder and CEO of RTR, in an official press statement.
In addition, the company will invest more in technological innovations and infrastructure, with an immediate focus on establishing its second fulfillment facility opening in Texas this spring.
"Rent the Runway has consistently demonstrated an ability to innovate and improve its customer experience and technology," said Ashley Woodruff, equity research analyst at T. Rowe Price Associates, Inc., in an official press statement. "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."