SRTX founder and CEO Katherine Homuth will step down from her role at the Montréal-based textile manufacturing and material innovation company.
The Information first reported the news, noting that Homuth’s departure was “part of an effort to secure a much-needed funding deal.” The Globe and Mail has reported that the yet-to-be-closed $40 million financing would be led by past investors H&M, Export Development Canada, Business Development Bank of Canada, and Investissement Québec (IQ).
“People lose nerve on the story when they realize that production is not at full steam. They want to see it.”
Katherine Homuth
Homuth confirmed to BetaKit that SRTX signed a term sheet for a funding round, which was shared with employees and shareholders this week. She said she would step down as part of the deal’s closure, calling it “the right decision for me and the business at this time.”
SRTX is the maker of Sheertex rip-resistant tights, which consist of a uniquely durable polymer several times stronger than steel wire.
Its manufacturing operations, which are solely located in Canada, put the startup in the crosshairs of US tariff impacts. The circumstances led Homuth to temporarily lay off 40 percent of its 350-person staff in February.
“With 85 [percent] of our sales in the US, and tens of millions invested in our Canadian factory, the impending US tariff changes and delays in closing the final portion of our fundraise have led to tremendous financial uncertainty,” Homuth wrote in a Substack post in February.
Homuth said the proposed 25-percent tariffs on Canadian imports, plus the elimination of the de minimis exemption, would slap a 16-percent additional tax on its shipments to US retailers and a total 41-percent tax on consumer orders. To dodge the duties, Homuth told BetaKit at the time she began sourcing certain materials from the US instead of internationally, and selling more products to stores within Canada.
Along with vertically integrating its Montréal factory last year, SRTX pivoted its sales from direct-to-consumer to wholesale, selling to brands such as H&M, Costco, and Macy’s.
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Homuth founded SRTX in Muskoka, Ont., in 2017 as Sheerly Genius. In addition to its flagship tights, SRTX has two B2B products: Cortex, a software-based manufacturing solution, and Watertex, a patent-pending water-repellent fabric. The retail company has secured around $250 million USD in financing to date, including debt. It was valued at roughly $350 million USD in 2022.
In December, SRTX raised $25 million USD ($35 million CAD) in convertible debt from IQ, the Québec government’s investment arm, to scale its wholesale manufacturing operations. Returning investors included Toronto-based ArcTern Ventures and Philippines-based Kickstart Ventures as part of a larger $70-million CAD round.
Homuth had been candid on social media about the company’s fundraising needs. In January, she said SRTX needed $23 million USD in equity financing by the end of Q1 2025 to invest in infrastructure, lower its per-product costs to $2.50 from $12, and unlock its path to profitability. The company is currently selling its tights at $10 per unit.
In a Substack post, Homuth called the strategy of proving market viability at a loss “not glamorous.” On The BetaKit Podcast, Homuth also spoke to the difficulty of fundraising given SRTX’s ambitious strategy.
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”Something that is very different about our fundraising journey to a B2B SaaS business is that we have really had to fight for and cobble together these rounds of financing,” Homuth said. “People lose nerve on the story when they realize that production is not at full steam. They want to see it. They want it to be crystallized and ready, which is incredibly hard and incredibly frustrating.”
At an International Women’s Day event focused on business risk and failure hosted by Invest Ottawa earlier this month, Homuth was candid about her ambitions for SRTX while separating her identity from her role within the company.
“You are not your company. You might be the current vision of the company, but you are not it in the end,” she said. “You have to be able to make some rational, cold decisions about what is right for you as well, as a human, in this journey.”
“I’m absolutely loving this, I’m hoping we can take this through IPO. But I also know I have a life as a founder beyond this, and I have lots and lots of things I want to do in the world.”
With files from Douglas Soltys and Alex Riehl. Feature image courtesy The BetaKit Podcast.
Update (3/30/25): This story has been updated with commentary from SRTX CEO Katherine Homuth and additional details on the financing.