Dubbed a “Neflix for Clothing,” personalized women’s clothing rental company Le Tote has reportedly raised $8.8 million in Series A funding from various venture capital firms, according to TechCrunch. The fundraising round was led by Azure Capital Partners with backing by Lerer Hippeau Ventures, Simon Venture Group, AITV, Epic Ventures, Arsenal Venture Partners and Funders Club.
Le Tote was founded back in 2013 after raising an undisclosed amount of seed money. It is similar to other women’s clothing retail companies like Rent the Runway, but rather than be a service for specialty wear, Le Tote deals with everyday clothing. At the cost of $49/month plus the cost of any clothes kept rather than returned, subscribers fill out a profile that asks about their style tastes, clothing sizes and jewelry preferences. Once the profile is completed, a Le Tote stylist sends out three garments and two accessories in the mail at a time which the consumer can wear as often as they choose before sending them back in the prepaid return box and waiting for the next outfits to arrive. If desired, consumers can personally browse Le Tote’s collection and handpick items they like into their virtual closet which will get included in their next shipment by the stylist.
Clothing is priced “moderately,” with dresses averaging $50 and shirts at around $30. Accessories such as jewelry, scarves, and belts run between $10-30, and there is an optional insurance program that subscribers can sign up for to guard against tears or spills. All returned clothing is cleaned by Le Tote before being sent on to the next subscriber.
In 2014, Le Tote’s revenues increased 600 percent, with 94 percent of users retaining their subscriptions on a month-to-month basis. While Le Tote’s founders note that the company is profitable on a per transaction basis, it is burning through its operational cash as a result of expansion, necessitating the Series A funding.
“We started 2014 with 13 employees, and at the end of the year we had 100,” said founder Brett Northart, who also mentioned that the cash raised will be going toward inventory and infrastructure improvements, having just moved operations to a new 25,000 square foot warehouse in San Leandro, California.