Rent the Runway Gets $15 Million From Kleiner Perkins to Be the Netflix of Fashion

Rent the Runway is a New York-based start-up that lets you look like a million bucks while spending much less.

Think of it as the Netflix for fashion.

The 18-month-old company lets you rent high-end dresses and accessories for special occasions. It even gives you the prepaid envelope to send it all back when you are done–no dry cleaning necessary.

If you didn’t know better, you would have thought Rent the Runway starred in the hit movie “Bridesmaids.” That’s because there are dresses for most occasions, even a wedding that you aren’t willing to break the bank over.

Rent the Runway was founded by two Harvard Business grads, Jennifer Hyman and Jennifer Fleiss, and is announcing today that it has raised $15 million in venture capital from Kleiner Perkins Caufield & Byers. The funding follows a first round by Bain Capital Ventures and Highland Capital totaling $16 million. Aileen Lee, a partner at Kleiner Perkins, will join Runway’s board.

On the site, women browse from 25,000 dresses from 95 designers, such as Dolce and Gabbana and Vera Wang. Next, they enter a date for the event and their dress size. After that, you make a reservation, and can even get a back-up size free, so you don’t have to worry about it fitting on the big night.

Rental prices vary depending on the price of the dress. For example, a knee-length dress from Sachin + Babi rents for $125 and retails for $660. But a $2,250 peach-colored dress from Nina Ricci rents more than twice that at $300. In general, the colors and styles seem endless.

The investment will allow Rent the Runway to offer a wider selection of brands and price points. It also will go toward some of the less glamorous work, such as beefing up its back-end systems to handle future growth and pay for new warehouses outside of New York City (coming in January 2012).

If the model doesn’t already sound like the mail-order DVD rental business, the company is willing to draw the comparison itself. In a release, it said it will also be personalizing the shopping experience “using proprietary algorithms rivaling that of Netflix.”

So far, the company claims to already have more than one million members.

Part of its business proposition is also exposing women to new brands.

In that way, Fleiss, the company’s president, says the company can be used as a marketing and customer acquisition channel for its partnering brands. In a release, she said, “Ninety-eight percent of our customers are trying brands they’ve never before worn. We are introducing experiential brand marketing into the fashion industry–not just a onetime transaction–which is the power behind Rent the Runway.”

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik