(Bloomberg) -- Looking for a growth business in a global pandemic? Try tacos.

Torchy’s Tacos, the restaurant chain that started as an Austin food trailer in 2006, sold an additional stake to an investor group led by private equity firm General Atlantic for about $400 million, as the maker of what it calls “damn good tacos” plans an aggressive expansion.

The deal, which also included new investors D1 Capital Partners, T. Rowe Price, Lone Pine Capital and XN, comes after Torchy’s opened 12 new restaurants in 2020, even as the Covid-19 pandemic crimped consumer spending and locked down much of the U.S. The chain, with 83 outlets in seven states, sells margaritas as well as tacos with offbeat names like “Mr. Orange,” “Trailer Park” and “Brushfire.”

“We’ve done really well through Covid,” Torchy’s Chief Executive Officer G.J. Hart said in an interview. “Sadly for much of the industry, it’s super challenging, but we feel like it’s a great time to be very offensive and get after it.”

Torchy’s has built a cult-like following since its inception 14 years ago, when former corporate chef Michael Rypka rode a red Vespa scooter around the Texas capital to push people to his initial location -- a converted trailer that predated the current food truck craze.

Ten More States

Torchy’s opened its first permanent restaurant in Austin, and expanded in Texas and then to nearby states including Colorado and Missouri. The company, officially known as Success Foods Management Group LLC, plans to add locations in 10 more states within four years.

Hart, who previously ran California Pizza Kitchen Inc. and Texas Roadhouse Inc., joined the company in 2018, a year after General Atlantic made its initial investment. Andrew Crawford, who leads consumer investments for General Atlantic, became the chairman of Torchy’s with the new infusion. The new capital will provide some liquidity for the founding investors, all of whom participated in the new round, as well as to expand the Torchy’s footprint.

“Over time we’re going to go from a regional concept to a super-regional concept, and ultimately a national brand,” Crawford said in an interview. He said Torchy’s locations could eventually number “in the thousands.”

IPO Likely

The new round of capital is a likely precursor to an initial public offering as soon as next year, said a person familiar with the company who asked not to be identified because the discussions are private. Hart and Crawford declined to comment on specific IPO plans.

While the pandemic has hammered fine dining, the overall restaurant sector has proved surprisingly resilient. New restaurant openings reached pre-pandemic levels in September, according to data compiled by Yelp. Restaurants’ new outlets are emphasizing order-ahead capability and what Yelp calls “efficient service cuisine” fared especially well, the report shows.

Prior to the pandemic, so-called off-premise sales accounted for about a third of revenue for Torchy’s, according to Hart. Now it’s as much as 60%.

As the pandemic set in, some Torchy’s locations changed hours, limited menus, built make-shift drive-thrus and developed new technology to interact with customers outside, sometimes in parking lots.

“We’ve learned you need to be much more flexible in how you provide service,” Hart said, noting that the company had already been building toward a scenario of half of its sales coming off-premise, through carry-out and delivery. “We have to have multiple ways to get people their Torchy’s fix.”

©2020 Bloomberg L.P.