Austin-based bootmaker and Western wear company Tecovas Inc. has raised a $56 million series C round that is expected to propel explosive growth in the coming year.
The funding, announced Jan. 12, was led by previous investor Elephant, which was joined by Access Capital, Seamless Capital and Kemmons Wilson Companies.
Tecovas has now raised roughly $120 million in equity funding; the company declined to provide an updated valuation after the raise.
Founded in 2015, Tecovas launched as a direct-to-consumer e-commerce company. It opened its first store in Austin in 2019 at 1333 S. Congress Ave. It is best known for its boots, though it also sells bags, jeans and other apparel. The company topped $100 million in revenue in 2021, according to the announcement, and sold its millionth pair of boots during the year's fourth quarter.
"Our goal at Tecovas is to build the most welcoming brand in western," founder and CEO Paul Hedrick said in a statement. "This latest funding will allow us to scale our vision and welcome even more customers to the brand. We've seen rapid growth since Tecovas' launch in 2015, and we plan to use the proceeds from this round of funding to continue on that trajectory, investing significantly in hiring, expanding our retail footprint, buying more inventory, and launching many new products."
Tecovas has more than 400 employees and 90 at its Austin headquarters, Hedrick said in an email, up from about 80 in October. The company plans to reach 130 local employees by the end of 2022, the CEO said.
With all that planned growth and new private equity funds, Hedrick thinks Tecovas can become "the most beloved heritage Western brand in the world." He acknowledged that long-term returns for investors will continue to be a priority, but noted he expects the company to be an independent brand for the foreseeable future, "whether that's public or private."
The company currently has 57 job openings, according to its LinkedIn page. Tecovas' jobs page on its website lists a number of open roles at its Austin headquarters, including for an accounting manager, a data engineer and a director of e-commerce.
Tecovas has been on a brick-and-mortar expansion kick of late, opening eight stores in the 18 months that preceded an October 2021 ABJ interview.
Tecovas now has 19 physical locations, including its South Congress flagship and another Austin location at Domain Northside. Seven more locations are spread throughout Texas, with others in Birmingham, Alabama; Scottsdale, Arizona; Denver; Aspen, Colorado; Atlanta; Omaha, Nebraska; Charlotte; Oklahoma City; Charleston, South Carolina; and Nashville. A 20th location in Fairfax, Virginia, is set to open Jan. 14 — marking the company's 11th state with a retail store.
Hedrick said the company plans to open another five to seven stores before the end of 2022.
When considering a new retail location, Hedrick said Tecovas considers factors such as prior e-commerce success and tourism.
"Our retail stores not only supplement existing market revenue; they tend to multiply our overall sales in each market we enter because of how productive they are," he said.
The company also in the process of moving from its current South Congress HQ to a 23,000-square-foot space within the WeWork coworking location on Barton Springs Road. The company said in October that its real estate broker is CBRE Group Inc.
So as it continues to grow, what will Tecovas look like in five years? Broadly, the company hopes to stay true to its core customers while opening "the spirit of Western to new audiences," Hedrick said.
"Practically, you'll definitely see more types of products (rugged footwear, women's footwear, apparel, and accessories are all big focuses for expansion in the next 1-2 years), more stores, and potentially even an international market or two five years down the road," Hedrick said.
The $56 million round for Tecovas is one of the first significant fundings announced by an Austin-area company in 2022. Atmosphere, a streaming TV startup, announced Jan. 4 raising $80 million in equity funding plus $20 million in debt financing.
Through the first three quarters of 2021, local companies reported a record $3.8 billion in funding across 265 deals, according to data from PitchBook and the National Venture Capital Association. Most of last year's huge rounds were raised by technology companies such as Workrise and Zen Business. It has been rarer recently for consumer packaged goods companies such as Tecovas to score eight-figure rounds.
