Katherine Homuth’s materials technology startup SRTX—which makes rip-resistant tights under the Sheertex brand—has raised hundreds of millions of dollars. It still hasn’t been enough. 

Over the weekend, Homuth pulled back the curtain on her company’s finances for the first time. “I haven’t been fully transparent online,” she admitted in a Substack post. “Sheertex is not profitable—not even close.” 

The Montreal-based company’s tights business is burning through US$30 million annually and recently poured US$50 million into new infrastructure. 

The founder told The Logic why she decided to speak up now. 

The big ask: SRTX is looking for a major injection of capital to get them off the ground, Homuth told The Logic in an interview. Money has been flowing in, but chasing the next small chunk of capital is an issue, she added.

“What we need is a big injection of capital. Someone with a lot of willingness to take a moonshot,” Homuth said. “Instead, we collect a little bit here and a little bit here and a little bit there.”
“It’s incredibly draining, because no one’s actually willing to make the big bet,” she added. 

SRTX has raised US$150 million in equity, US$50 million in convertible debt, and US$50 million in other debt to date, according to Homuth’s post—bringing the total to US$250 million. Last week, Investissement Québec announced it was investing US$25 million, a deal that’s been in the works for years, Homuth said. 

The company needs more funding in order to scale its fibre production, which Homuth says is key to its profitability. It has already slashed manufacturing costs from $100 to $13 per item and aims to bring that down to $5 by the end of next year.

Homuth has considered taking her company public, but views struggling publicly-traded companies—like Taiga Motors and Rent the Runway—as a cautionary tale. “We certainly do think of an IPO. But it’s, in our mind, something that we do after profitability,” Homuth said.

‘Does anyone actually care?’: Homuth’s musings weren’t a part of any sort of “big strategy,” she said. They were partially a response to an article from The New York Times which endorsed rival tights-maker Shapermint in a head-to-head review against Sheertex, and another from Vogue that profiled Swedish Stockings.

The two companies are “using the same old technology,” Homuth said in an interview. “They are developing no materials, and basically getting touted in the same breath as being, as innovative as, if not more innovative than what we’re doing.”

Homuth said by glossing over their lack of innovation, it left her wondering if anyone “actually cares” about her aspirations. SRTX isn’t just making tights—it’s also creating recycling technologies for the world’s textiles, a recyclable spandex replacement, software to trace apparel in the supply chain and other automation projects, Homuth wrote. The lack of recognition–and investment—has her questioning if investors value bold, long-term innovation. 

More than just a Canada problem: The lack of investment in manufacturing technologies is a challenge across North America’s venture capital landscape, but it’s particularly pronounced in Canada, Homuth said. 

“How do we build a culture that supports harder, longer bets? Because if we keep just looking for the easy win, the outsourced win, we’re just never going to really change as an economy,” she said.

Investors are far more willing to back software-as-a-service (SaaS) projects that are easier to build, Homuth added. But manufacturing companies, like SRTX, need funding to bridge the gap before their innovations are truly realized. 

Homuth, who has envisioned building all the world’s clothes out of Canada, warns that without bold, large-scale investments, the economy risks becoming “irrelevant.”