Fort Worth-Based HTeaO Gets Growth Investments from Two Dallas PE Firms

An HTeaO location in Tyler. [Photo: HTeaO]

Fort Worth-based HTeaO is quenching thirsts with “ultra-premium” ice teas and coffee at 68 locations in five states, with 93 units currently under construction. This week, Dallas-based Crux Capital and Trive Capital both decided to have a taste—by getting a minority stake in the company.

The partnership will enable HTeaO to expand its brand to new markets, leveraging the resources of both Dallas PE firms. HTeaO will also use the investments to attract new talent and “employ innovative technology to improve quality of service while enhancing the customer experience.” Financial terms weren’t disclosed.

Launched in 2009 from Amarillo

Howe first got the idea for a shop focused oniced tea when his parents’ restaurant in Amarillo, Buns Over Texas, began offering a lineup of flavored ice teas. Sales saw a jump—leading Howe to open his first Texas Tea location in the same Panhandle city. By 2018 he had three locations, rebranded them as HTeaO, and began selling franchises, licensing 22 in the first month, according to The Hustle. 

HTeaO currently offers 26 flavors of fresh-brewed iced tea, from Root Beer to Sweet Blueberry Green to Sweet Turbo Citrus Energy Tea and more.

“As we enter our next phase, we’re thrilled to partner with Crux and Trive and leverage their significant financial resources and operational expertise,” Howe said in a statement. “The support and resources of these two firms should enhance our focus on unit-level economics and developing a franchise system at scale. The power of our brand has never been stronger, and this strategic partnership will help expand on what we’ve built.”

‘Significant’ expansion planned for 2023 and beyond

HTeaO currently operates in Texas, Florida, Kansas, New Mexico, and Oklahoma—and says it’s planning “significant expansion” for 2023 and beyond.

Shravan Thadani, Partner at Trive Capital, says HTeaO has the potential of spreading the love for its flavored iced teas nationwide.

“HTeaO has become the leader in the drive-thru tea category with its innovative, taste-driven offerings,” Thadani said in the statement. “We’re excited to build on HTeaO’s significant momentum and strengthen its brand leadership across the U.S.”

Wayne Moore, Partner at Crux Capital, says HTeaO’s founder has found a niche and taken off with it.

“Justin Howe has built a differentiated drive-thru beverage concept focusing on providing unparalleled iced tea offerings,” Moore said. “Justin’s vision has resulted in an incredibly passionate consumer following, driving industry-leading growth and unit economics.”

Thadani and Moore joining HTeaO’s board

As part of the transaction, Thadani and Moore will join HTeaO’s board of directors.

Crux Capital says its core mission is to invest in and grow small, profitable companies, focusing on investing in a select number of high-quality businesses and partnering with management teams to build value over the long term. The Dallas firim works closely with company management to implement strategies that “build and unlock value over time.”

Trive Capital has more than $4 billion of regulatory assets under management, and focuses on investing equity and debt in “strategically viable middle-market companies” with the potential for transformational upside through operational improvement. Trive aims to maximize returns through “a hands-on partnership that calls for identifying and implementing value creation ideas.”

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