Rent the Runway saw its shares leap on its stock market debut on Wednesday on the Nasdaq.
The fashion brand priced its initial public offering (IPO) at the top of its predicted range and sold more shares that it originally planned due to strong demand.
Stock climbed by 10 per cent when trade started on Wednesday morning, giving it a fully-diluted market value of $1.7 billion.
The news will come as a great relief to the company after suffering badly during the pandemic and previously having to raise funding at a 25 per cent discount in order to reach its unicorn status.
“Our ideal outcome because this gives us all the capital we need to continue to grow, to reach profitability and significantly delever all at the same time,” Rent the Runway chief executive Jenn Hyman said.
The floatation has caught the eye of investors after the company has served as a benchmark of a new business model for the fashion industry.
The company offers its users a subscription-based model, a first for the clothing industry, whereby customers pay a monthly fee to borrow items of clothing from an online closet of over 18,000 pieces of clothing.
Investors have been reluctant to continue backing heavily loss-making companies however Rent the Runway’s positive flotation has changed the mind of many.
Many senior-level bankers have warned potential IPO investors were becoming more reluctant about investing in markets as they stuttered in late September, leading to a fall in post-listing performance.
Despite this, markets have regained their pace over the last few weeks with companies performing well.
The Renaissance IPO index, which tracks the performance of recent US listings, has climbed 12 per cent from its early October low, compared with a 7 per cent gain in the broader S&P 500 stock index.