Rent the Runway said Monday it raised $15 million in venture capital from Kleiner Perkins Caufield & Byers. The investment in the New York dress rental business bring capital raised to more than $31 million, with prior financing of more than $16 million from Bain Capital Ventures and Highland Capital. The startup had pre-launch seed funding from Bain Capital Ventures in early 2009.
Designer Dress Rental Company Plans To Grow Inventory, Operations And Talent
NEW YORK, May 23, 2011 /PRNewswire/ — Rent the Runway, the leading online destination for dress, accessory and bridesmaid dress rentals, has raised $15 million in venture capital from Kleiner Perkins Caufield & Byers (KPCB). At only eighteen months into business, the investment from KPCB signals the extremely fast growth of the online designer dress and accessory rental business. Prior to KPCB’s $15 million investment, Rent the Runway received more than $16 million from Bain Capital Ventures and Highland Capital, including seed funding pre-launch from Bain Capital Ventures in early 2009.
Jennifer Hyman, Rent the Runway CEO and co-founder stated, “The success of KPCB’s past and existing portfolio companies is a sign of the incredible strength of their team who we are thrilled to work with.”
With the $15 million investment, Rent the Runway will scale from a transactional online business into an operational powerhouse. The company has begun to develop a sophisticated inventory and reservation management system with embedded predictive capabilities that to date has only existed for commodity goods such as cars and hotels. Rent the Runway will also open the first of multiple warehouse hubs outside of New York City in January 2012. Additionally, the company will personalize the shopping experience using proprietary algorithms rivaling that of Netflix.
Rent the Runway has quickly grown to over one million members since launching in November 2009. Key to this rapid expansion has been its ability to serve as a marketing and customer acquisition channel for its partnering brands. According toJenny Fleiss, President and co-founder of Rent the Runway, “Ninety-eight percent of our customers are trying brands they’ve never before worn. Our customers are having an intimate and emotional experience with that brand as they wear it to a special occasion in their life – whether it’s a wedding, prom, or a cocktail party. We are introducing experiential brand marketing into the fashion industry – not just a onetime transaction – which is the power behind Rent the Runway.”
With continued growth in mind, a part of the investment will be used towards Rent the Runway’s inventory. In addition to the 25,000 dresses and accessories currently in stock, new designers will be added this summer and fall at both higher and lower price points to accommodate Rent the Runway’s diverse customer base. New designers include Thakoon, Carmen Marc Valvo, Z Spoke by Zac Posen, Versus by Versace, Narciso Rodriguez, Kate Spade, Anna Sui, Opening Ceremony and Rachel Zoe. Deeper quantities will also be purchased from Rent the Runway’s current roster of 140 designers.
The company will also invest in key talent positions across the business in both technology and operations. Recent key hires include Nisha Kumar, Chief Financial and Administrative Officer, who was in previous executive roles at AOL and Priceline.com.
Aileen Lee, a partner at KPCB who will join Rent the Runway’s Board of Directors commented, “Rent the Runway is a magical experience for women – enabling women to experience high-end designer fashion at a younger age, and creating ‘Cinderella Experiences’ for women of all ages. It is not only changing what women wear and how they shop, but also helping women learn about brands and pieces in which to invest.”
ABOUT RENT THE RUNWAY:
Rent the Runway is the premier online destination for dress, accessory, and bridesmaid dress rentals. With a revolving roster of over 140 top designers and 25,000 of the season’s hottest dresses and accessories, Rent the Runway is designer fashion delivered to her doorstep for a fraction of the price. For all of life’s special occasions, www.renttherunway.com provides the Cinderella experience for women everywhere.
ABOUT KLEINER PERKINS CAUFIELD & BYERS:
Since its founding in 1972, Kleiner Perkins Caufield & Byers has backed entrepreneurs in over 600 ventures, including Amazon, Amyris, Bloom Energy, Electronic Arts, Genentech, Google, Intuit, Netscape, Sun, Symantec, and Zynga. KPCB portfolio companies employ more than 250,000 people. More than 150 of the firm’s portfolio companies have gone public. Many other ventures have achieved success through mergers and acquisitions.