Canadian fashion-tech startup Rax is looking south, launching its peer-to-peer clothing rental marketplace in the US with an immediate focus on New York. The shift plants the Toronto-based company — which was founded and bootstrapped by entrepreneur Marley Alles — squarely in America’s rapidly evolving circular fashion economy, where consumer desire for access over ownership is increasing.
Rax is a true marketplace that introduces people who want to rent clothing of high quality with people who wish to monetize pieces sitting in the back of their closets. Nearly 5,000 users in Canada are using the app after hearing about it by word of mouth (and through social “build in public” updates), and now Rax wants to repeat that model’s “word-of-mouth memetic spread” (as Smith put it) to several key US cities.
A Longer-Wear Twist on Fashion Rentals for Real Life
Where Rax sets itself apart is in length. Although a number of rental services stress short windows — daily or weekend loans — Rax permits users to book pieces for as long as six months. That extends to categories beyond one-time occasions: say seasonal outerwear, maternity wardrobes, ski trips, internships, or prolonged travel.
Longer rentals can also smooth the unit economics for both parties. Renters don’t have to keep paying new daily fees, and lenders can get more use out of their clothes without constantly having to relist and ship garments. The model would also fit a sustainability narrative: Prolonging the life of an active garment is among the very best means to reduce per-wear footprint, an idea that’s often evangelized by circularity advocates like the Ellen MacArthur Foundation.
Why the US Market Makes Sense for Rax Today
The US is going to spike. Secondhand and circular fashion is becoming increasingly mainstream; a recent report on the industry from ThredUp predicts that the US secondhand market will continue to grow at an accelerated pace in coming years, led by younger consumers and value-driven households. Rentals are still a smaller subcategory than resale, but they do ride the same cultural shifts: sustainability as status symbol; newness without clutter; and social-media-pumped-up demand for new looks.
New York, with its fashion-savvy shoppers and events, is a natural beachhead. It’s also a city where competitors have proved demand across models, from inventory-heavy names like Rent the Runway to peer communities like Tulerie. In that landscape, a light marketplace — no owned inventory/backbone stock, variable durations — offered a differentiated value proposition of its own.
Founder-Led Execution and Product Roadmap
Alles, who loaded the first version with her own code and seeded the marketplace with friends and early adopters, arrived in startups via accounting. The next phase for the company in the US will involve continuing to enhance the core peer-to-peer experience, and developing a rental infrastructure product for designers and retailers that are looking to incorporate rental without having to stand up their own tech.
That platform ambition is in line with an industry trend more generally. Brands are experimenting with rental and recommerce to cut waste, respond to customer needs for flexibility, and diversify revenue. As more labels contemplate end-of-life strategies, a turnkey rental stack for discovery, booking, payments, and dispute resolution might be appealing.
Economics and Risks to Watch in US Rental Markets
Operating a rental marketplace in the US is not an easy task, but it’s mostly operational complexity. Trust and safety, cleaning standards, and dispute resolution are key to repeat usage. Logistics and care can easily overtake costs in rental models, as public filings and interviews with operators across the category have consistently shown. Rax’s longer-term structure may solve some of that churn and shipping frequency, but it will still have to have very strong guardrails around the condition of garments, fit guidance, and protections for both lender and renter.
There’s also the regulatory patchwork. Marketplace facilitator laws necessitate nuanced taxing and remitting on a per-state basis, while cross-border payments increase the layers of compliance to ensure. If Rax wants to scale beyond one city, getting these foundations right now is crucial.
Sustainability Signal in Fashion’s Footprint
The environmental context matters. According to the UN Environment Programme, fashion makes a significant contribution to both global emissions and wastewater. Though the exact climate impact of rental versus resale or repair (particularly when you factor in shipping and cleaning) remains up for debate, few dispute that higher utilization rates are key to mitigating waste. By allowing clothes to percolate through circulation for months, rather than days, Rax is leaning into the part of rental most likely to result in real per-wear gains.
What Success Might Look Like for Rax in New York
If it can make a lot more New York early adopters look at and use that competitive purchase offer, keep inventory quality high, and not grow too greedy eating lenders’ margin to maintain an attractive take rate, Rax might have a defensible niche in the United States. A balanced amount of occasionwear and practical longer-term categories — outerwear, suiting, and maternity — would help smooth seasonality and strengthen unit economics.
The greater upside is platform leverage. By becoming a base that brands can white-label when they want, as well as double up and share with Rax, it could open multiple growth vectors for both the peer-to-peer and branded use-case. As the rental market proved difficult for many newer startups struggling with heavy inventory costs, a software-first approach with longer-duration economics could well be the feature that finally makes fashion rental feel not just fashionable, but sensible.
