Restaurant startup Toast sells its IPO shares at $40, topping the previous price range and valuing the company at $20 billion
Last week, Restaurant tech startup Toast announced it was going public this week at a $16 billion valuation. Today, the Boston-based startup has priced its IPO at $40 a share, after previously raising its price range to as high as $36 per share, according to a report from CNBC, citing a person familiar with the matter who asked not to be named because the announcement isn’t yet public. Toast will rade on the New York Stock Exchange under the ticker symbol “TOST.”
As we reported last week, Toast previously planned to sell its shares at $30 to $33, meaning the company could raise as much as $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, according to its updated IPO prospectus filing with SEC.
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.
Toast’s IPO comes after a roller-coaster ride during the 2020 pandemic as the company saw its revenue decline by 80% as restaurants closed and cities across the country shut down. The company slashed half of its workforce in mid-2020 and took desperate measures to stay afloat.
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.
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.