Austin-based Torchy’s Tacos has teamed with a New York equity firm to help speed the chain’s growth.
The firm, General Atlantic, has taken “a significant minority interest,” Torchy’s management said Tuesday.
Specific financial details of the investment, which is expected to close in the third quarter, weren’t released.
Torchy’s, which got its start with a single food trailer on South First Street in South Austin in 2006, has grown to 46 locations in three states – Texas, Oklahoma and Colorado – over the past decade. New locations are in the works in Arlington, Kingwood, West Houston and Tulsa, Okla.
All Torchy’s locations are company-owned. The chain doesn’t currently offer franchises.
“Thanks to all of our taco junkies, Torchy’s has experienced incredible growth in the past 11 years,” founder Michael Rypka said in a written statement. “We are excited about how the partnership with the General Atlantic team will help us continue to grow our business while staying committed to doing what we do best, which is to serve our guests ‘Damn Good Tacos.’”
Rypka says he mortgaged his house and maxed out his credit cards to get the business up and running. Over the years, he’s won a host of awards, grabbed headlines in food and travel magazines and attracted a devoted fan base. Then-President Barack Obama, for instance, stopped by Torchy’s during a 2016 visit to Austin, ordering three tacos off the menu – a Democrat, a Republican and an Independent.
A privately held company, Torchy’s doesn’t publicly disclose its sales figures. Citing estimates provided by Technomic, a recent Restaurant Business Magazine report said the chain brought in about $32.8 million in 2015, up 31 percent over the previous year.
The average Torchy’s location brought in just over $1 million that year, according to Restaurant Business Magazine. That was down 4 percent comparted to 2014 estimates.
As part of the deal, General Atlantic’s Andrew Crawford and Shaw Joseph will join the Torchy’s board of directors. So will Todd Diener, former president of Chili’s.
Other board members include Rypka and his Torchy’s partners: vice president of business development Farrell Kubena, vice president of finance Rebecca Kubena, vice president of operations Jason Wald and vice president of technology Alfonso Angelone.
“We are excited to partner with Torchy’s to continue to cultivate and expand the beloved brand’s passionate customer base,” Crawford said. “We admire the management team’s deep ambition and believe the authenticity of Torchy’s uniquely positions the concept to be successful across a wide-ranging demographic of customers and geographies.”
General Atlantic invests in a wide variety of businesses. Past investments have included Airbnb, Uber, Buzzfeed, Too Faced Cosmetics and Tory Burch.
“Torchy’s Tacos’ innovative flavors and food combinations have enabled the company to reach a growing market of fast-casual diners,” Joseph said. “We believe that the combination of General Atlantic’s industry resources and expertise, as well as our global brand-building experience, will help us to grow Torchy’s into a category leader, while still remaining true to the original mission of the brand.”