Rent the Runway’s IPO pricing indicates bullish market for unicorns of all stripes

It’s early in the Wednesday trading session, meaning that we’re waiting on the first trades of Rent the Runway stock on the public markets.

But what we do know is that the company priced at $21 per share, giving it a valuation of $1.33 billion using a simple share count, and around $1.47 billion on a fully-diluted basis. For a company last valued at around $1 billion in 2019, those figures may not sound too impressive. But I think that they are.

TechCrunch’s earlier coverage of the Rent the Runway IPO filing and pricing run was, respectively, skeptical and pessimistic. And yet public investors not only had enough interest for the IPO to proceed, but also for the clothing rental company to price at the top of its range.

Let’s talk about why that’s bullish for unicorns more broadly.

Tech-enabled versus Tech

A software company is a tech company. And an e-commerce platform is a technology company. But a firm that merely employs e-commerce channels to sell its goods is not. It’s, instead, tech-enabled.

The difference is no small nuance. Tech companies can find themselves valued at 40x or 50x revenues in today’s markets. Concerns that are merely tech-enabled, however, tend to trade at lower multiples.

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