Katherine Homuth, founder and CEO of Sheertex, at the company offices in Montreal, on Dec. 20, 2019.Christinne Muschi/The Globe and Mail
A Montreal company trying to upend the global pantyhose business by making an “unbreakable” product has raised $101-million led by Swedish retail giant H&M Hennes & Mauritz AB.
Sheertex Holdings Corp. said in a filing with Canadian securities regulators that $62.25-million came from a Swedish investor, which is H&M. Nanna Andersen, head of H&M’s Co:Lab investment arm, is the sole Swedish director listed on the company’s board. Co:Lab invested in the company’s past two venture fundings in 2020 and 2021. Existing investor Export Development Canada also backed the most recent financing, one of 33 investors in the round alongside others from Canada, the United States, Hong Kong, the Netherlands and New Zealand.
“We’re excited to use this funding to increase investments in the development of our proprietary materials while expanding our vertically integrated manufacturing,” Sheertex founder and chief executive officer Katherine Homuth said in a statement to The Globe and Mail. “We’re lucky to have found incredible partners that share our commitment to sustainability and are excited to grow together both in hosiery and through new categories.”
Ms. Homuth, a serial entrepreneur, founded Sheertex in 2017 three years after the Mississauga native sold her e-commerce startup, ShopLocket, becoming a millionaire at 23. Her goal was to commercialize a sturdier alternative to nylon pantyhose that are prone to developing runs, or tears.
She had no textile experience but sensed a big opportunity to upend a category with US$2-bilion-plus in annual sales in the U.S. After trying numerous materials, she settled on the same polymer used to make bulletproof vests.
After early challenges turning the tough material into pantyhose, she managed to produce tights that could not be torn by human hands, with material proving to be 10 times stronger than steel; to prove the point, company videos show its leggings can survive being stuffed with a fire extinguisher, pineapple and spiky conches. The product has won rave reviews from both fashion and technology publications and was named a top invention of 2018 by Time.
Ms. Homuth also won over early investors including Club Monaco and Joe Fresh founder Joe Mimran and prominent Canadian women angel investors including Michele Romanow, Eva Lau, Heather Payne and Nicole Verkindt. Ms. Lau at one point helped convince others to invest by extolling Sheertex’s virtues during a presentation at the Creative Destruction Lab accelerator program, which Sheertex attended early in its life, saying she owned nearly $1,000 worth of Sheertex products and that it solved a problem many women had.
Sheertex rapidly outgrew its first, 2,000-square-foot production facility in Ontario’s Muskoka region, prompting a move to Montreal in the fall of 2019, where Ms. Homuth was constantly travelling to dye the product and tap the expertise of the metropolis’ established textile trade. Within months of restarting production at a 115,000-square-foot facility in the working-class St. Michel neighbourhood, the pandemic hit. That forced a total shutdown of production and Sheertex’s direct-to-consumer e-commerce business until mid-summer of 2020.
Still, Sheertex more than doubled revenues in 2020, to $15-million, and reached $33-million in 2021, despite the high price for the product – which can exceed $100 a pair.
The company is looking to double sales again this year as it works to reduce the cost to manufacture the product, which is now running at just under $20 an item for some products, down from an original cost of $75 each. Sheertex has also introduced a $29 pair of tights made from a fully automated process it has introduced to its factory.
Sheertex has previously raised US$60-million in investment capital. The company’s investors include Toronto cleantech fund ArcTern Ventures, New York’s G2VP and the BDC Women in Technology fund.
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Sean Silcoff