Rent the Runway seeking $25 million in funding round
Digital-first fashion rental service Rent the Runway is reportedly seeking $25 million in its latest funding round, which would see the company valued at approximately $750 million, under a previous valuation of $1 billion.
The funding round is being led by existing Rent the Runway investor T. Rowe Price, said Business of Fashion on Thursday, citing people familiar with the matter.
T. Rowe Price’s first investment in NYC-based Rent the Runway came last year, as part of a $125 million funding round led by Franklin Templeton Investments and Bain Capital Ventures, which saw the company valued at $1 billion.
With its latest funding push, Rent the Runway would be joining a growing list of start-ups offering discounts to private investors as they attempt to secure funds in order to deal with the economic challenges presented by the ongoing Covid-19 pandemic.
The company runs five brick-and-mortar locations, spread over New York, Chicago, Washington DC, San Francisco and Santa Monica, all of which have been closed since March 16, in line with coronavirus restrictions.
Earlier this month, Rent the Runway had to respond to a Huffington Post report claiming that the company was mistreating its employees during the coronavirus crisis, failing to promptly introduce appropriate safety measures in its warehouses and laying off retail and customer service associates with little or no warning.
“Because of the Covid-19 pandemic, RTR's sales have dropped significantly,” the company said at the time. “We therefore have had to make difficult decisions to sustain the business by cutting costs across the board.”
According to Business of Fashion’s sources, who did not wish to be named because the matter is private, Rent the Runway’s plans for its latest funding round are not final and may still change.
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