Shares of clothing rental company Rent the Runway ended their first day of trading below the company’s IPO price, closing at $19.29.
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Rent the Runway’s first day as a public company started off strong. Its stock opened nearly 10 percent above its IPO price on Wednesday, as the New York-based startup began trading on the Nasdaq under the ticker symbol RENT. The company priced its shares at $21—the top of its range—and raised $357 million through its IPO.
The stock opened at $23 on Wednesday before falling in the afternoon.
Rent the Runway’s IPO comes after a tough year or so for the company. While the popular clothing rental company reached a $1 billion valuation in 2019 and joined the unicorn club, the pandemic hit the business hard. Fewer people wanted to rent clothing to go out, with stay-at-home orders, work-from-home policies, and fewer social events.
The company’s revenue fell and its losses grew in 2020 as subscribers canceled or paused their memberships, and fewer people rented its clothing.
Rent the Runway laid off employees, closed its stores and cut costs in 2020 to weather the pandemic. Last year, it raised funding at a $750 million valuation—down from its earlier $1 billion valuation.
More recently, Rent the Runway has shown signs of recovering. The company had nearly 127,000 total subscribers in the six months that ended on July 31, 2021, up from around 109,000 during the same period in 2020.
Rent the Runway is backed by investors including Bain Capital Ventures and TCV.
Illustration: Li-Anne Dias
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