(CNBC)– Blue Pool Capital, a financial firm that principally invests the wealth of Alibaba founders Jack Ma and Joe Tsai, has invested $20 million into the women’s clothing rental business Rent the Runway, Recode has learned.
The filing was spotted by the research firm Lagniappe Labs, which said the round valued Rent the Runway, with the new funds, at a little less than $800 million.
Rent the Runway co-founder and CEO Jennifer Hyman said her company, which is profitable on an Ebitda basis, was not planning on raising new funding but saw this as a rare opportunity at an advantageous time in the business’ lifecycle.
“I have huge respect for Joe and Jack and wanted to opportunistically involve them in the business as we embark on our biggest growth stage,” Hyman told Recode in an interview. “Given the global aspirations that we have — especially in Asia — I thought they would be very good people to have around the table.”
Tsai will become a board observer with Rent the Runway, which means he can participate in board meetings but does not get voting rights like board directors do.
Rent the Runway last raised funds in late 2016, when it secured a $60 million Series E investment led by Fidelity. That deal valued the company at $750 million, according to PitchBook. To get this new deal done with little fuss, Hyman allowed Blue Pool to invest the new money at the same terms as that Series E deal, she said.
Rent the Runway was founded in 2009 as a service that allowed women to rent designer dresses for special events at a fraction of the cost of the retail purchase price. Over the last two years, though, the company has added a subscription model that lets women rent a rotating closet of clothing for everyday wear.
The obvious question: Does Tsai and Ma’s interest make Alibaba a likely suitor for Rent the Runway? Not exactly, according to Hyman.
“The more visionary, smart people who you have relationships with, it just opens up your optionality,” Hyman said. “It’s good for us whether we IPO, or we sell the business, or we stay private.”
We’ll discuss this and more with Hyman when she sits for an onstage interview at An Evening with Code Commerce at Shoptalk on March 20 in Las Vegas.