Montréal-based SRTX, the maker of Sheertex “unbreakable” tights, has secured $25 million USD ($35 million CAD) in convertible debt from the Québec government’s investment arm to scale its wholesale manufacturing operations in the province.
SRTX confirmed to BetaKit that the investment is part of a larger $50 million USD ($70 million CAD) round of all-primary convertible-note financing, which the company is hoping to close by the end of the year. Returning investors include Toronto-based ArcTern Ventures and Philippines-based Kickstart Ventures. According to SRTX, the new money will bring its total funds raised to nearly $250 million USD, including debt.
CEO Katherine Homuth said that the investment from IQ will allow SRTX to boost production capacity while investing in vertical manufacturing in Québec.
SRTX is the holding company for Sheertex Inc., the manufacturer of Sheertex rip-resistant tights. Sheertex makes its pantyhose out of a uniquely durable polymer called ultrahigh-molecular-weight polyethylene (UHMWPE), which has been called a ballistic-grade “super material” several times stronger than steel wire.
In addition to its flagship rip-resistant tights, SRTX has two B2B products: Cortex, a software-based manufacturing solution, and Watertex, a patent-pending water-repellent fabric.
In a statement, founder and CEO Katherine Homuth said that the investment from IQ will allow SRTX to scale and boost production capacity while investing in vertical manufacturing in the province—meaning that SRTX will own and operate all levels of its supply chain. The new funding will also help SRTX expand its raw material manufacturing of the fibres used in Sheertex and Watertex.
“We are convinced that, with partners like IQ, our decision to invest in vertical manufacturing in Québec will prove to be a key component for the success of the company,” Homuth said in a statement.
With the new financing, the company plans to add 100 people to its 350-person team, with the goal of reaching profitability by late 2025. The retail company was valued at roughly $350 million USD in 2022 following a $101-million USD Series C.
RELATED: “It’s life or death”: Québec ecosystem frustrated after IQ suspends early-stage program
IQ president and CEO Bicha Ngo said in a statement that Sheertex has an “undeniable competitive advantage in the market” due to its rip-resistant technology.
The funding announcement comes as IQ experiences budgeting constraints resulting in layoffs and startup funding program suspensions. According to the Globe and Mail, the investment in Sheertex marks a renewal of interest in textiles after little investment in the sector for several years.
Homuth told The Globe and Mail that Sheertex is now moving away from a direct-to-consumer online business model to targeting wholesale retailers. Some retail clients include large brands such as H&M, Costco, and Walmart.
Two-time founder Homuth started Sheertex in 2017, then known as Sheerly Genius. The startup graduated from the winter 2018 cohort of Y Combinator and raised over $190,000 USD on Kickstarter for its snag-resistant tights by 2023. SRTX opened its new Montréal headquarters in February 2024, following the introduction of a new factory in 2023 in Pointe-Claire, Que.
The pivot to using Québec’s hydroelectric power for manufacturing operations has helped cut down on production costs, Homuth said, and the company hopes to drive costs down further in the coming year.
The company is also developing a project called “Renew,” which aims to reduce waste by recycling used tights for reuse in its raw material manufacturing.
Feature image courtesy CNW Group/SRTX.
The post Sheertex maker SRTX gets $35 million CAD backing from IQ to grow manufacturing operations in Québec first appeared on BetaKit.