Rent the Runway Joins Glossier in the Elite Club of Female-Founded Unicorns
Earlier this week, Glossier hit unicorn status, reaching a valuation of $1.2 billion. Rent the Runway has quickly followed suit, with an investment round of $125 million lifting its valuation to $1 billion, according to a company release on Thursday.
Unicorns—startups valued at $1 billion or more—used to be a rarity in Silicon Valley. Those sky-high valuations are growing more and more common, but remain elusive for female founders. As of May 2018, of 130 VC-backed unicorns in the United States, only 14 had a female co-founder. Glossier founder and CEO Emily Weiss and Rent the Runway co-founder and CEO Jennifer Hyman and co-founder Jennifer Fleiss have now joined their ranks.
“Shared, dynamic ownership is a movement that Rent the Runway has pioneered over the last decade and we’re excited to continue to lead the market and innovate our subscription service,” Hyman said in a statement. The company launched with a formalwear rental service and now also offers a subscription service for all kinds of clothing. It recently expanded into home goods as well. With this round of funding, Rent the Runway plans to continue to scale its subscription business, which it says grew 160% year-over-year, and broaden the categories it offers.
Both Rent the Runway and Glossier serve female customers in consumer industries, beauty and apparel.
“Founders are thinking a lot more about what the consumer journey of women—like themselves—looks like and basing their businesses on that,” says Anagha Hanumante, an analyst for CB Insights. “[These valuations] really represent the opportunities around female-focused products and services.”
The funding round that pushed Rent the Runway over the $1 billion threshold was its biggest to date at $125 million. It was co-led by Franklin Templeton Investments and Bain Capital Ventures, and it brings the firm’s total capital raised to $337 million since its founding a decade ago.
Glossier’s unicorn moment earlier this week came after a $100 million cash infusion. Prior to the round, Glossier had last been valued at $390 million while Rent the Runway was valued at $800 million in August 2018.
So who’s next? An analysis by the firm CB Insights with the New York Times in February picked 50 companies likely to hit unicorn status soon. Zola, the wedding startup run by Shan-Lyn Ma, made that list. The startup has raised over $140 million and was last valued at $600 million. (CB Insights last month picked Glossier as a future unicorn but didn’t have Rent the Runway on the list. U.S. startups with female co-founders on the list include Front and Mathilde Collin; and Upgrade and Adelina Grozdanova.)
The female-founded companies that have already reached the $1 billion milestone include Anne Wojcicki and Linda Avey’s 23andMe; Nextdoor, co-founded by Sarah Leary; Cloudflare, co-founded by Michelle Zatlyn; Credit Karma, co-founded by Nichole Mustard; Houzz, co-founded by Adi Tatarko; and included Julia Hartz’s Eventbrite before the ticketing company’s initial public offering in September.