Founders: Jennifer Hyman (CEO), Jenny Fleiss
Launched: 2009
Headquarters: New York City
Funding: $210 million
Valuation: $770 Million (PitchBook)
Key technologies: Machine learning, robotics
Disrupting: fashion, retail, e-commerce
George Kavallines | CNBC
Subscription clothing companies have been around for a few years now, but it was arguably Rent the Runway that put the concept on the map. Co-founders Jennifer Hyman — who has served as CEO since the company's founding — and Jenny Fleiss started the company in 2009 with the simple premise of letting women rent, rather than buy, designer apparel and accessories. After all, in this age of social media postings, how many times can you wear an expensive gown without everyone having seen you in it on Instagram? Apparently, a lot. That's why the company has grown to more than 9 million members and north of $100 million in revenue.
When the Harvard Business School classmates started Rent the Runway, their concept was simple: Members choose a dress, rent it for a few days, and then send it back to the company in a prepaid envelope. A Badgley Mischka gown that retails for $1,290? Yours to rent for $180.
Last year, the company introduced a new way for women to access all types of clothing on a more regular basis. RTR Update allows members to rent four items a month for $89. The company's unlimited option gives women the ability to rent four items on constant rotation each month for $159. In addition to the subscription service, there are also five RTR retail stores across the country that stand in as any woman's dream closet. Subscribers can walk in, return their rental pieces and walk out with a new item — without ever having to take out a credit card.
The company has raised more than $210 million in financing from firms such as Bain Capital, Highland Capital and Fidelity Management. Earlier this year Blue Pool Capital, the venture arm that invests on behalf of Alibaba's CEO Jack Ma, invested $20 million into the company. There's been talk of an IPO for a few years, but Hyman and her team have yet to set a date.
