An affiliate of Blue Pool Capital, an asset management firm established by Alibaba founders Jack Ma and Joe Tsai, has invested $21 million in Rent the Runway, according to a statement from Rent the Runway emailed to Retail Dive. In a statement, Rent the Runway CEO Jennifer Hyman said: "Over time, we have been fortunate to build a great relationship with the Blue Pool team, and I am delighted to have such forward-thinking business leaders behind Rent the Runway as we embark on our biggest growth stage yet."
According to a report from Recode, the funding values Rent the Runway at just shy of $800 million. Blue Pool and Alibaba didn't immediately return Retail Dive's request for comment.
The fashion rental and subscription company previously closed a $60 million Series E funding round in December 2016, led by Fidelity Management and Research Company, with existing investors Technology Crossover Ventures, Bain Capital Ventures, Highland Capital Partners and Advance Publications also participating.
Launched in 2009, Rent the Runway seemed to struggle a few years ago amid the complex logistics as a renter of high- to mid-fashion apparel. As Rent the Runway has evolved, it's also tested the limits of its own revolutionary premise — that people will begin to think of their wardrobes as existing "in the cloud," making it virtually infinite.
It's a step beyond the original concept of renting special occasion dresses and shoes — the Cinderella approach — to renting casual wear and office wear on a routine basis. It's a concept still very new for most people, but co-founder and CEO Jennifer Hyman has said that it continues to gain traction.
The stance is a direct challenge to fast fashion, which relies on ownership on the cheap and a closet's high turnover. Another selling point, related to that turnover, is the notion that renting clothes is kinder to the planet, although the back-and-forth shipping and constant dry cleaning may challenge that premise to some extent.
The company has experimented with its model since its founding, moving into physical retail in 2013 with a space on the second floor of New York's Henri Bendel and its first standalone store 11 months later. In announcing the completion of its Series E funding round a little over a year ago, Rent the Runway said it would use the capital to further flesh out its brick-and-mortar presence.
In October, the company launched a more affordable membership tier and unveiled its first national brand campaign, with 15- and 30-second TV spots and subway ads in New York City illustrated by Instagram-famous artist Julie Houts.
Hyman told Recode last week that the company wasn't looking for new funding but saw Blue Pool's interest as a good opportunity, especially in light of its goals to expand in Asia.
At the same time, Alibaba has been adding to its fashion offerings and jumping on opportunities that come along. In December, as one example, fast fashion retailer H&M said it would expand its presence on Alibaba's Tmall, as the clothing seller grappled with falling sales at its physical stores. The Chinese e-commerce giant also reportedly made an offer to online luxury retailer Yoox Net-A-Porter, though Compagnie Financière Richemont ultimately snapped up the remaining available shares.