Founders: Jennifer Hyman (CEO) and Jenny Fleiss
Launched: 2009
Headquarters: New York City
Funding: $337 million
Valuation: $1 billion (PitchBook)
Key technologies: Machine learning, robotics
Industry: Fashion, retail, e-commerce
George Kavallines | CNBC
When the Harvard Business School classmates Jennifer Hyman and Jenny Fleiss started Rent the Runway in 2009, their concept was simple: Customers choose a dress, rent it for a few days and then send it back to the company in a prepaid envelope. A Christian Siriano dress that sells for $1,200? Yours to rent for $150.
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Now, 10 years later, the clothing rental concept has been copied many times over, but RTR keeps finding new ways to stay ahead of the pack. Last May it introduced Platform, curated capsule collections from 39 brands, including J. Crew, Levi's and Club Monaco. Up until now those brands haven't been part of the subscription economy, but through RTR, customers can rent their apparel.
The company estimates that by the end of this year, apparel for Platform will account for 25% of RTR's inventory. And to make clothing rentals even easier, RTR introduced a drop-off service in October. Six cities — New York, San Francisco, Los Angeles, Chicago, Washington, D.C., and Miami — now have drop-off boxes in 20 WeWork locations. The company says subscribers are increasing their usage in the cities with the boxes, and additional locations (hotels, gyms, residential buildings) are being planned. All of these moves helped the company reach 11 million members to date.
To broaden its customer base, in April the company announced it was going to start offering clothing for girls sizes 3Y to 10/12Y from designer brands including Chloe, Fendi and Little Marc Jacobs.
And if renting clothing isn't enough, RTR is now doing the same with home goods. In March it partnered with West Elm to make its home accessories available for rent. It's the first time RTR has expanded outside apparel and accessories.
Key investors include Bain Capital Ventures, Highland Capital, Fidelity Management and Franklin Templeton. Every year, there's talk of an IPO, but the company has yet to confirm a date.
