Rent The Runway seeks $315 million in IPO
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Rent the Runway is seeking as much as $315 million in its U.S. initial public offering.
The fashion-rental company plans to sell 15 million shares for $18 to $21 apiece, according to a filing Monday with the U.S. Securities and Exchange Commission.
At the top end of that range, it would have a market value of $1.3 billion based on the outstanding shares listed in the prospectus. Accounting for employee stock options and similar holdings, the company would have a fully diluted value closer to $1.5 billion. That compares with a valuation of $870 million after a funding round completed in April, according to data provider PitchBook.
The New York-based company has struggled to grow through the coronavirus pandemic as lockdowns gave people little reason to dress up. The spread of the covid-19 Delta variant and work-from-home trends have had minimal impact on its business and financial performance, the company said.
Rent the Runway reported a net loss of $85 million on $80 million in revenue for the six months ended July 31. That compared with a $88 million loss on $88.5 million in revenue during the same period a year ago.
While the company's losses persisted, its subscription numbers increased. Its active subscribers more than doubled since Feb. 1 to almost 112,000 as of Sept. 30, according to the prospectus.
Founded in 2009 by Jennifer Hyman and Jenny Fleiss, Rent the Runway cautioned in its filing that it may be unable to achieve or sustain profitability.
"As of July 31, 2021, we had an accumulated deficit of $674.1 million," it said. "We will need to generate and sustain increased revenue and manage our costs to achieve profitability. Even if we do, we may not be able to sustain or increase our profitability."
THE WASHINGTON POST