Rent the Runway, an online retailer of rented dresses and accessories, said this week it had raised $15 million from venture capital firm Kleiner Perkins Caufield & Byers. The 18-month-old company says it will use the funding to beef up its inventory and reservation management system, help pay for more warehouse space, hire employees and develop personalized shopping tools.
The new investment comes after a 2009 funding round that brought in $16 million from Bain Capital Ventures and Highland Capital. Aileen Lee, a Kleiner Perkins partner, will join Rent the Runway’s board of directors. "Rent the Runway is a magical experience for women, enabling them to experience high-end designer fashion at a younger age,” she says. “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."
Rent the Runway works like this: A shopper visits its e-commerce site, renttherunway.com, and enters the date on which she wants to wear the dress. The site returns dresses and accessories available on that date. The shopper filters results by size, body shape, style, designer and occasion; the shopper also can call a toll-free number for more help. The shopper enters two sizes for the desired dress—that helps ensure that one will fit—and then selects a four-day or eight-day rental period. When the rental period ends, the shopper returns the apparel in a pre-paid, pre-addressed return envelope that can be dropped into any blue USPS mailbox. Rent the Runway handles dry cleaning.
The company says is carries some 25,000 dresses and accessories from 140 designers. The company in January expects to open the first of what it calls multiple warehouse hubs outside of New York City.
For more information about e-commerce investment, visit the Internet Retailer Conference & Exhibition 2011, where Jeremy Liew, managing director, U.S., at Lightspeed Venture Partners, will speak in a session entitled “The entrepreneur-financier tightrope: Keeping both sides happy when outside money comes in.”