Rent the Runway

Rent the Runway operates a fashion rental service it calls the Closet in the Cloud, letting customers rent designer clothing and accessories through a monthly subscription or one-time Reserve rentals, and buy pieces through resale. Jennifer Hyman and Jennifer Fleiss founded the company in New York in November 2009. Its principal executive offices are at 10 Jay Street in Brooklyn. Subscribers accounted for 90% of revenue in fiscal 2025, and the company ended that year with 143,796 active subscribers.

Bain Capital Ventures and Highland Capital Partners were early backers, with partners from both firms on the board since 2009 and 2010. In late 2012 the company raised $20 million led by Condé Nast, with Bain Capital Ventures, Highland Capital Partners and Kleiner Perkins Caufield and Byers participating, followed in March 2013 by $4.4 million from American Express and Novel TMT Ventures, bringing total funding to $54 million. A December 2016 round of $60 million was led by Fidelity Investments with TCV, Bain Capital Ventures, Highland and Advance Publications. In March 2019 a $125 million round valued the company at $1 billion. In total the company raised more than $400 million in venture capital, from investors including Franklin Templeton and T. Rowe Price, and it also borrowed from lenders including a Temasek facility and Ares.

Rent the Runway priced its IPO on Nasdaq under the ticker RENT in October 2021, selling 17 million Class A shares at $21.00 each; funds affiliated with Franklin Templeton indicated interest in buying up to $75 million. A shareholder class action over IPO disclosures followed, and in September 2026 the company agreed to settle it for $9 million in cash and stock. In October 2025 it completed a recapitalization with an investor group of Aranda Principal Strategies, STORY3 Capital Partners and Nexus Capital Management: existing debt was cut to $120 million maturing in 2029, the remainder was exchanged for 26.2 million new shares, and a $12.5 million rights offering was backstopped. Fiscal 2025 revenue was $329.8 million, up 7.7%. Paige Thomas became chief executive in September 2026, and a further $15 million rights offering launched that month.

For venture investors the case shows the limits of a unicorn label. Early funds such as Bain Capital Ventures and Highland held for about 12 years before the IPO, but within four years of listing the company needed a debt-for-equity exchange and two rights offerings, and the 2025 exchange shifted a large share of ownership to the lender group. Capital intensity from owning rental inventory, funded partly with debt, shaped returns as much as subscriber growth did.