- GeneralIPO
- February 22, 2021
- 4 minutes read
New IPO Hearsay: Restaurant Payments Company Toast
The latest company to get into the center of rumors of an impending public offering is Toast, a heavily-funded developer…
The latest company to get into the center of rumors of an impending public offering is Toast, a heavily-funded developer of software and hardware used to manage operations and run payments for restaurants. The company is planning an initial public offering that could value it at around $20 billion and has held talks with banks Goldman Sachs and JPMorgan Chase to underwrite a listing, according to a report from the Wall Street Journal.
Toast is a ten-year-old startup that’s carved a lucrative market for itself providing cloud-based software for managing operational activities and payments for restaurants. The company’s main service is payments processing, with its software paired with dedicated hardware, but it still offers additional services and features like payroll processing and email marketing.
Toast also has a business division, Toast Capital, that lends money to restaurants signed up on its platform. Basically, the company is akin to Square or PayPal but primarily for the restaurant industry.
In 2020 when the Covid-19 pandemic took the world by storm, Toast’s business initially suffered highly and led the company to announce plans to cut up to half of its workforce, blaming a drop in revenue of over 80% in March. However, restaurants transitioned to takeout services and other offerings later in the midst of lockdowns and began adopting Toast’s software as a major way to do that. In fact, this transition saw Toast get a bevy of new customers.
Toast is a highly-funded company, with over $900 million raised and was valued at $5 billion from its most recent funding round. The company’s investors including notable names like Tiger Global, TPG, G Squared, Greenoaks Capital, and TCV.
The market in recent months has been hot and very well-receptive to technology companies so it’s no surprise that Toast could be looking to ride into the markets soon. According to the Journal, it’s targeting a very high valuation of around $20 billion, a valuation that seems possible with the bull market trend for technology companies in recent months.
Just last week, Toast added a new board member, American Express executive Susan Chapman-Hughes. The company also counts the outgoing Salesforce CFO Mark Hawkins as a board member.
