- Reuters/Shannon Stapleton
- In an interview with CNBC, Rent the Runway CEO Jennifer Hyman explained her approach to leading a business, stating, “I haven’t been given the permission or privilege to lose a billion every quarter.”
- Hyman’s comments were seen as a dig at notoriously unprofitable companies like Uber and Lyft that raised significant funding before going public earlier this year with mixed results.
- Rent the Runway’s most recent fundraising in March round pegged the company’s valuation at $1 billion.
- But Rent the Runway does not disclose its own financials, include whether the privately-held company is profitable or not.
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Rent the Runway CEO Jennifer Hyman runs her business according to a simple rule.
“I haven’t been given the permission or privilege to lose a billion every quarter,” she told CNBC in an interview on Thursday.
Although Hyman’s comments sound like a sensible enough business guideline, it can also be read as a not-so-subtle swipe at some of the other tech startups that have been in the headlines recently. Uber and Lyft, for example, were some of the most highly anticipated tech IPOs of 2019 even though both had operating losses of $1 billion or more in the past year.
Since going public, Uber and Lyft have both seen shares of their stock tank amid withering criticism that they were substantially overvalued on the private market.
Despite Hyman’s quip about not having permission to lose $1 billion, it’s not clear what Rent the Runway’s financial statement looks like, including whether the 10-year old startup is profitable itself.
The company turned a profit on an adjusted basis in 2016, according to a Recode article at the time. But representatives from Rent The Runway refused to comment on the company’s current financial condition when contacted by Business Insider.
Rent the Runway, which allows customers to rent designer clothing, recently raised $125 million in funding at a $1 valuation, according to the New York Times.
Hyman told CNBC that she hopes the new funding, led by Franklin Templeton Investments and Bain Capital Ventures, will give the company the flexibility to go public when the time is right instead of bending to investor pressure.