Restaurant tech startup Toast is going public next week at a $16 billion valuation
Toast is a Boston-based restaurant tech startup the has been helping struggling restaurants navigate and survive through the COVID-19 pandemic over the past 18 months. Now, the startup is gearing up for its IPO next week that could potentially value the 10-year old at more than $16 billion.
According to its updated IPO prospectus filing with SEC, Toast said it plans to sell its shares at $30 to $33, raising more than $700 million at the top end of the range, which would value the company at $16.5 billion. “The Company is seeking to complete an initial public offering (“IPO”) of its Class A common stock. In the event the Company does not complete an IPO, the Company expects to seek additional funding through private equity financings, debt financings, or other capital sources,” Toast said in a filing with SEC.
“As a result of the COVID-19 pandemic, we’ve seen a big shift in dining behavior and an acceleration in technology adoption. Many restaurant operators have rebuilt their businesses to meet new guest expectations for ordering online, contactless payments, and digital hospitality. Through new Toast product offerings like contactless Order & Pay for indoor dining, curbside notifications for takeout, and flat-fee delivery via Toast Delivery Services, we’ve supported our customers through this transition, Toast said.
We wrote about Toast late last year after the company announced a $35 million relief fund to help struggling restaurants navigate this coming winter and survive through the COVID-19 pandemic.
Boston-based Toast is a cloud-technology platform that was “purpose-built for the restaurant industry. We began with an idea to make checking out easier for servers and diners through a payment app,” says Narang, who also serves as the President of Toast. After a few iterations with the original concept, they “quickly learned that [they] actually needed to build a whole new point of sale and restaurant technology platform to support the restaurant community.”
Founded in 2011 by Aman Narang, Jonathan Grimm, and Steve Fredette, the Boston, MA-based Toast’s technology platform combines restaurant POS, front-of-house, back-of-house, and guest-facing technology with a diverse marketplace of third-party applications. The company helps brands like José Andrés’ ThinkFoodGroup streamline operations, increase revenue, and deliver superior guest experiences. With this new funding, Toast is well-positioned to fundamentally reshape the $900B restaurant industry for the better.
As of June 30, 2021, Toast says it was serving approximately 48,000 restaurant locations across approximately 29,000 customers, processing over $38 billion of gross payment volume in the trailing 12 months, partnered with Toast to optimize operations, increase sales, engage guests, and maintain happy employees.
The bulk of Toast’s revenue comes from what the company calls financial technology solutions, consisting primarily of fees paid by customers for payment transactions. Less than 10% comes from subscriptions. The restaurant industry is currently one of the largest, most complex, and most competitive markets in the world, with an estimated 22 million restaurant locations globally generating greater than $2.6 trillion in annual sales in 2021.