Rent the Runway shares started trading Wednesday at $23 apiece, or 9% above its initial public offering price of $21.

That gave the fashion rental platform a fully diluted valuation of roughly $1.7 billion. The stock was recently up about 10%.

On Tuesday, Rent the Runway’s IPO had priced at the top end of its expected range. It sold 17 million shares for $21 each, after marketing 15 million shares for between $18 and $21.

The listing follows the public debut of eyeglasses maker Warby Parker and comes ahead of sneaker retailer Allbirds’ anticipated IPO. There has been a wave of trendy, venture-backed retailers testing investors’ appetite on Wall Street.

Founded in 2008, Rent the Runway is in the midst of staging a comeback after demand for its clothing subscription service cratered in 2020. Last year, the its valuation shrank to roughly $750 million as the pandemic weighed on Rent the Runway’s ability to attract users.

Rent the Runway’s active subscriber in 2020 count fell to about 55,000, from more than 133,000 a year earlier. Revenue tumbled 39% to $157.5 million. While its net loss widened to $171.1 million from $153.9 million in 2019.

According to CEO Jennifer Hyman, however, the health crisis ultimately helped make its business more resilient.

“If anything, this pandemic pushed us even more as consumers into sharing models and into valuing experiences over ownership,” Hyman said in an interview on CNBC’s “Squawk Box.” “We’ve seen that in our customer base.”

Rent the Runway, which describes itself as a “closet in the cloud,” had to get creative to stay afloat, when few consumers were looking for apparel to wear out of the house. It shuttered its stores and overhauled its subscription plans, sunsetting an unlimited option. It also entered the resale market, allowing consumers to shop without a membership.

“It’s an incredible new customer funnel into subscription,” Hyman said about the resale option. “It’s exactly how we look at our special events rental business. … It’s a way to introduce a new customer to how valuable our assortment is and to how easy it is to come to Rent the Runway.”

Now, the company sees its growth is not entirely dependent on women returning to offices.

“Women did not have to return to the office to return to Rent the Runway,” Hyman said. “And so as women do return to an office, even if it’s just a few days a week, or return to a party, that’s just continued upside for the business.”

Ninety percent of the company’s customers continue to work from home, Hyman added, but subscriber levels are rising.

Instead, a return to social events such as weddings, galas and birthday celebrations is helping Rent the Runway rebound.

The company counted nearly 98,000 active subscribers in the six months ended July 31, up from roughly 54,000 in the same period of 2020. By September, active subscribers grew to 112,000, according to its latest securities filing.

Today, subscribers account for more than 80% of Rent the Runway’s revenue. As an example of one of its subscription options, a subscriber could rent eight items per month at a monthly rate of $99 for the first two months and then $135 for each month thereafter. Rent the Runway offers options from more than 700 brands.

“It’s about renting a coat to walk around your neighborhood, or wearing clothes to lounge around your house … and then going out to dinner with a friend,” Hyman said in a phone interview. “As we’ve expanded those assortments, we’ve seen her engage with us more days of the year.”

The IPO also offers Wall Street another barometer to gauge investors’ appetite for the clothing rental business. Rent the Runway joins other publicly listed companies Poshmark, The RealReal and ThredUp, all of which sell secondhand clothing and other accessories.

According to Hyman, Rent the Runway plans to use the capital raised in its debut to pursue expansion opportunities, including international growth and launching into new categories.

The IPO was led by Goldman Sachs, Morgan Stanley and Barclays.

Rent the Runway is a CNBC Disruptor 50 company.

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