How Does RentTheRunway Look In 3-5 Years’ Time?
RentTheRunway filed confidentially for IPO in July. Seriously I feel bad for these folks.
The bottom line is the confidential part of the IPO tells me all I need to know.
The idea is conceptually great - don't buy new stuff all the time, but get great lightly used items for your next event.
They raise $100M at a $1B valuation in 2019. Then another round at a $750M valuation. Down rounds happen, but let's be honest, the business went down significantly last year.
They tried retail stores and had to shutter them because people weren't doing discovery there, just picking up their subscriptions. That means not a lot of new customers to justify the expense. Plus, well, the pandemic.
Then in what seemed like a margin play, they decided to try resale from their site. I expect this would be quite profitable particularly for pre-rented items. Challenge is the "rent" branding. Who even knows to go there to buy?
Post-pandemic RentTheRunway I expect to rebrand, with an acquisition, as a large fashion marketplace, except Etsy just acquired Gen-Z based dePop in what looks like an extremely smart move right about now. Can't grow without more inventory and a marketplace is the most efficient way to acquire inventory.
So the question: does the industry still need RentTheRunway?
