Torchy’s Tacos on Friday announced additions to the company’s ownership group as part of a round of funding that will be used to accelerate the brand’s continued growth nationwide, with plans to expand to an additional 10 states over the next four years.
General Atlantic, a leading global growth equity firm that initially invested in 2017 and majority shareholder in Torchy’s, will now be joined in the ownership group by D1 Capital Partners, T. Rowe Price, Lone Pine Capital and XN. Torchy’s Founder Michael Rypka and all of the members of the original ownership group will reinvest as individuals.
“All of us at Torchy’s are incredibly grateful to Mike and the original ownership group that built this amazing brand over the past 14 years, and we are thrilled that they will all remain a part of the ownership group as individuals,” says G.J. Hart, CEO of Torchy’s Tacos. “We are also very fortunate to welcome investors of the caliber of D1 Capital Partners, T. Rowe Price, Lone Pine Capital and XN. Pairing these four firms with our existing partner General Atlantic, we feel that we have assembled a premier ownership group that will allow us to accelerate our growth and write the next chapter in Torchy’s history.”
Founded in a food trailer in Austin, Texas in 2006, Torchy’s Tacos is a “craft casual” brand that offers a wide selection of handcrafted tacos, queso, margaritas and more in a unique, welcoming experience. The brand currently has 83 locations in seven states, with an Average Unit Volume (AUV) of $3.8 million. Despite the challenges of the COVID-19 pandemic, Torchy’s continued its growth in 2020 by opening 12 new locations and expanding the brand to three additional states.
“Since our initial investment in 2017, Torchy’s has demonstrated the strength of its brand as it has successfully captured impressive unit growth,” adds Andrew Crawford, Chairman of Torchy’s and Global Head of Consumer at General Atlantic. “We admire the management team’s deep operational experience and commitment to providing an original and differentiated experience. We believe their vision will continue to resonate across a wide-ranging demographic of guests, geographies and footprints as Torchy’s expands across the United States.”
Shaw Joseph, Torchy’s Board member and Principal at General Atlantic, added, “Today’s announcement marks an exciting milestone for Torchy’s. We look forward to continuing to partner with the Torchy’s team and the new members of our ownership group to further grow the brand’s passionate guest base.”
Torchy’s Tacos was founded by former corporate chef Michael Rypka, who was inspired by a love for tacos and a passion for experimenting with food to bring an untraditional taco experience to the people of Texas. Born out of a food trailer and a bright red Vespa that Rypka drove across Austin spreading the word about Torchy’s, the concept was welcomed with enthusiasm by taco lovers in the Austin market. Since 2006, the brand has expanded to 83 locations across seven states including Texas, Oklahoma, Colorado, Arkansas, Louisiana, Missouri and Kansas.
North Point Advisors, Inc. and BofA Securities acted as placement agents on the transaction. Additional terms of the deal were not disclosed.