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Rent the Runway Is Off and Running in Public Debut

Rent the Runway raises $357 million in its IPO. It's set to start trading on Nasdaq today.

Rent the Runway RENT debuted at $23 per share Wednesday, above its share offering range, and rose in its first minutes of trading. 

Shares of the high fashion rental company on Wednesday closed down 8.1% to $19.29. 

The company upsized its initial public offering and priced the shares at $21, the high end of the $18-to-$21 range the high-fashion-rental company had estimated. 

In the sale Rent the Runway raised $357 million, or $332.9 million after underwriting discounts and expenses.

The New York company sold 17 million Class A shares in the offering, 2 million more than the company had expected. 

The underwriters, led by Goldman Sachs, Morgan Stanley and Barclays, also have a 30-day option to purchase as many as 2.6 million more shares. 

Rent the Runway is scheduled to start trading on the Nasdaq Wednesday under the ticker symbol RENT. 

The listing values the company at $1.3 billion based on the shares outstanding listed in its S-1 filing with the U.S. Securities and Exchange Commission. 

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That compares with a previous valuation of $870 million after Rent the Runway closed a funding round in April, Bloomberg reported. 

The company said that while the pandemic hampered its business -- as fewer people needed luxury fashion while quarantining at home -- it has seen a rebound in 2021.

"We look forward to bringing the magic of Rent the Runway to more customers, and to any thing we don't need or want to own forever," Co-founder and Chief Executive Jennifer Hyman said in a statement.

"Our flexible platform has the potential to power not just the Closet in the Cloud - but our lives in the cloud." 

The company reported a net loss of $85 million on revenue of $80 million for the six months ended July 31. 

That loss was narrower than the $88 million on revenue of $88.5 million from the year-earlier period. 

Rent the Runway says consumer trends toward access and away from ownership makes its business model viable. 

The company says that in 2020, subscription models accounted for 64% of the music market, 71% of the U.S. home entertainment market and 17% of the U.S. hospitality market.