To help fuel its growing subscription business, refinance debt and widen its operations, Rent The Runway has linked up with Temasek for a credit facility of $200 million. The retailer’s subscription business, in particular, has grown 150 percent year over year since its rollout, according to reports.
“We are very pleased that the company has demonstrated the kind of business model, growth prospects and financial discipline that make it possible to access a credit facility of this size with an equity-minded, long-term partner like Temasek – they have a proven track record of supporting disruptive high-growth companies,” CFO Scarlett O’Sullivan said, according to reports.
As to why the company went with a credit facility instead of an investment from a venture capital firm, O’Sullivan has said the facility allows the company to access capital when it needs to do so, and was able to refinance a prior facility. In addition, she said the credit facility is “less dilutive to our existing shareholders.”
The news comes a few months after Blue Pool Capital, a financial company with the main role of investing for Jack Ma and Joe Tsai, the co-founders of Alibaba, had invested $20 million in Rent the Runway.
Recode, citing a filing spotted by research firm Lagniappe Labs, reported that with the round of funding, Rent the Runway is valued at slightly under $800 million. In an interview with Recode, Jennifer Hyman, chief executive of Rent the Runway, said the company wasn’t looking to raise new funding, but it was a rare chance and came at a good time in the business’ lifecycle.
“I have huge respect for Joe and Jack and wanted to opportunistically involve them in the business as we embark on our biggest growth stage,” Hyman said in the interview. “Given the global aspirations that we have — especially in Asia — I thought they would be very good people to have around the table.”
You Might Also Like:
With 75 percent of QSRs reporting an increase in fraud attempts last year, it’s time for them to pick up the pace on security. The latest Mobile Order-Ahead Tracker reports new findings on how chargebacks are taking a cut out of QSR profits, along with the usage stats of the top mobile apps. Stephanie Meltzer-Paul, Dunkin’ Donuts VP of digital and loyalty marketing also tells PYMNTS how the coffee giant tailors order-ahead to repeat customers.
Download the Mobile Order-Ahead Tracker July 2018 Edition below: