Taking on Victoria’s Secret hasn’t been so easy for the online brands that emerged in recent years to court millennial and Gen-Z consumers. A decade into the direct-to-consumer underwear boom, the lingerie retailer remains the undisputed giant of the category, and its top rival, Aerie, came from the minds at American Eagle, not a Silicon Valley start-up.

But investors are still betting on newcomers to come up with an idea that finally disrupts the market. Knix, a Toronto-based underwear brand known for its leak-proof products, is the latest contender, having raised $43.5 million in a growth equity round led by private equity firm TZP Group, the company told BoF. The model Ashley Graham also participated in the round.

Knix’s raise follows Instagram-savvy underwear brand Parade, which recently raised $10 million in Series A funding. A number of online underwear brands have garnered investor interest in recent years as potential challengers for Victoria’s Secret market share, including ThirdLove, Rihanna’s Savage X Fenty and Thinx, another period underwear startup.

Like its direct-to-consumer peers, Knix emphasises comfort and inclusivity in its marketing. But the brand is counting on a niche to win: its leak-proof technology. The brand has multiple patents on absorbent fabrics designed to eliminate the need for tampons or pads, according to founder and chief executive Joanna Griffiths. The company said its annual revenue is on track to exceed $100 million.

“With Covid and what has happened in the past year, there is a once-in-a-lifetime opportunity for new brands today,” Griffiths said, pointing to trends like wireless bras and loungewear as major areas of growth. “The way consumers are buying underwear is changing. And we’re starting to see that Victoria’s Secret’s position [in the lead] isn’t guaranteed.”

Knix plans to launch categories adjacent to underwear that could also use its leak-proof patents. The brand already carries swimwear and experimented with a leggings drop last October that generated over $1 million in sales within an hour.

“There’s a lot of usage for this type of functionality, whether it’s nursing bras or sweat-proof T-shirts,” Griffiths said. Already, one in every four customers wears Knix products everyday, she added. Its other product categories include bras, bodysuits and pyjamas.

The brand also plans to expand its physical footprint: it has stores in Toronto and Vancouver, with three more opening soon.

Before its most recent growth equity round, Knix had raised $6 million and reached profitability in addition to growing annually at an average rate of 150 percent. Knix was created around the same time as its competitor in the menstrual underwear category, Thinx, and both are frontrunners in the space.

But leak-proof underwear is a growing market. Victoria’s Secret recently introduced its own “period panties” under the Pink vertical. And just like Victoria’s Secret, Knix is now hoping that a wide assortment of underwear and underwear-adjacent offerings will make it a billion-dollar brand one day.

“This is how you win,” Griffiths said. “You move from specialised products that people wear three or four times a month, to being a product that people can wear everyday.”

Related Articles:

For Lingerie Brands, Taking on Victoria’s Secret Is Harder Than It Looks

The Race to Replace Victoria’s Secret