Rent the Runway’s slogan might as well be: Friends don’t let friends wear H&M to the most important events in their lives. The company solves the perennial “closet full of clothes and yet nothing to wear” problem that most women face, by allowing them to rent designer clothes for a big event for about 10% of the price.
It’s clearly a problem women have. The question– like most rental businesses like Zipcar– is how many women want to rent clothes as the solution.
So far, there’s at least one million active users, spanning a wide demographic of women, from 15 years old to 45, says Jennifer Hyman, Rent the Runway CEO and cofounder. “That was a surprise,” she says. “Initially we thought it would be only young women in their 20s.”
There’s a lot of heavy lifting behind the scenes in this business. A warehouse in New York dry cleans, repairs and re-rents thousands of designer pieces. An algorithm helps women pick age-appropriate, body-appropriate pieces. A social layer allows them get advice from a small circle of trusted friends and family.
The company had raised $16 million to date from Highland Capital and Bain Capital, bringing the total amount raised so far to more than $30 million. And, surprisingly given the costs to a business like this, the company was profitable before this round.
Hyman says the money will be used to build out its underlying technology, physical distribution hubs all over the country, a sophisticated inventory management system and the micro-social network aspect of the site. Kleiner’s Aileen Lee will join the board and no doubt, we’ll talk about it on today’s social commerce panel at Disrupt.