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Rent the Runway struts towards a cash call at a smaller valuation: Bloomberg
Posted on Thursday, 21 May 2020 10:51
Clothing rental company Rent the Runway is close to raising new funding that would value the fashion startup at less than its previous USD 1.00 billion valuation, Bloomberg reported.
The news provider cited people familiar with the matter as saying the business is looking to fetch around USD 25.00 million in fresh capital.
Previous investors such as T Rowe Price Group are likely to take part in the round, which could value the group at about USD 750.00 million, the sources noted.
However, no final plans have been made and therefore there is no guarantee the funding will take place.
A representative for Rent the Runway declined to comment on the funding round when contacted by Bloomberg, while T Rowe Price did not make a statement to the news provider.
Founded in 2009, the business allows women to rent dresses for occasions such as weddings, as well as everyday wear, through subscriptions that allow members to fill their wardrobes with outfits for the work week.
According to the website, Rent the Runway has hundreds of thousands of options and plans that start from USD 69.00 per month.
Last year, the group experienced some disruptions that resulted in the business offering cash and refunds to customers who had orders cancelled due to supply chain issues, Bloomberg observed.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 23 deals targeting consumer goods rental companies announced worldwide in 2020 to date.
In the largest of these, Japanese apparel retailer and online video rental group Geo Holdings sold an 11.7 per cent stake to Shirokuraya for JPY 6.65 billion (USD 61.78 million).
Deals targeting US-based furniture rental group Feather Home, French electric scooter provider Cityscoot and Japan-headquartered medical equipment lender Elan, among others, have also been announced in the year so far.
© Zephus Ltd