Footwear startup Holo Footwear is moving its headquarters from Portland to Grand Rapids, Michigan, where founder Rommel Vega says he has found support for his company.
It isn’t just Michigan where he found support — for the startup and as a Latino founder — but the Midwest broadly. He is closing a $5 million seed round that includes venture funds in Michigan, such as ID Ventures, and in Chicago. Locally, the only investor he has secured since launching in 2020 is Elevate Capital.
“We’ve been raising for about year,” he said. “I met with every fund in Portland early on. Everyone said no but Elevate Capital.”
Holo makes sustainable footwear at a $50 to $100 price point, lower than many other sustainable products. The industry veteran wanted to find a lower price point to ensure that sustainable products aren't just for luxury buyers.
The company has three different types of shoes for men and women on the market and is sold in Nordstrom, Dick’s Sporting Goods, Public Lands, Backcountry. In two weeks it is launching in REI stores. Products are available in stores and online. Vega expects to hit $5 million in revenue this year.
Holo has a team of eight. Vega expects to hire another 15 in Grand Rapids in the next 12 months. He also expects several more designs to be released over the next year, including a running shoe and hiking shoe.
The team at Elevate Capital has been consistently impressed with Vega and the experienced team he has built. The fund worked with him for a year to secure more local support.
“I would have loved for him to stay, but he has to go where he is getting better support,” said Nitin Rai, managing director of Elevate Capital.
It might sound surprising that a footwear startup would leave what is frequently billed as the "Silicon Valley of footwear." For Vega that reputation and its influence actually prompted him to leave.
Vega never did stints at Nike or Adidas. He's spent time at Puma, DC Shoes, Columbia Sportswear, Keen and Merrell. He thinks that hurt him locally.
“I think a lot of my experience from the venture scene in the Portland metro area is it’s very biased, especially to footwear companies,” Vega said. “The folks at the funds in town are biased because they worked at Nike. The questions coming from funds were like ‘Nike does it this way so you gotta do it this way.’”
Because Nike pushes direct-to-consumer channels, investors wanted the same from Vega. But, he envisions a strategy that can embrace retail stores and online. He noted that even direct-to-consumer darling AllBirds is going to Nordstrom, a retailer that has carried Holo since it started.
He also found skeptics questioning his ability to hit the lower price points while still making quality sustainable products.
“Just because you didn’t work someplace doesn’t make you less capable to solve a problem,” he said, adding that there are many ways to solve these challenges that aren’t the way that Nike does it.
Elevate’s Ben Nahir likened Vega's experience to what happens to tech founders who don’t come from the social circles of universities like Harvard and Stanford. The barriers get higher.
“It’s disappointing to us that a company and a founder we are excited about and impressed with is not getting the support in Oregon,” Nahir said. “He has to go where the money and resources are.”
In addition to the investment support,, Vega is excited about the Midwest's talent pool as well. Wolverine Worldwide, based nearby in Rockford, Michigan, includes the brands Merrell, Saucony, Keds and Hush Puppies.
Plus, there are several colleges with strong design schools: Vega's alma mater College for Creative Studies in Detroit; Kendall College of Art and Design in Grand Rapids, and University of Cincinnati College of Design.
“A lot of talent comes from the Midwest,” Vega said. “For us to be close to the talent and kids that want to stay in the Midwest. This creates a pipeline of talent in the company for future innovation.”
