Restaurant Software Firm Toast Pops Up to 65% in IPO Debut
(Bloomberg) -- Toast Inc., which helps restaurants handle payments, jumped 56% in its trading debut after a $870 million initial public offering priced above a marketed range.
Shares of the Boston-based company opened at $65.26 on Wednesday, up 63% from the $40 offer price. The company sold 21.7 million shares on Tuesday after marketing them at $34 to $36 apiece.
Toast’s shares closed at $62.51 in New York trading, giving the company a market value of $31 billion. Accounting for employee stock options and restricted stock units, the company would have a fully diluted value of more than $35 billion.
Toast’s software allows diners to order online, in person or over their phones. Restaurants can also use the guest data it captures to craft loyalty and marketing programs.
The company cut its workforce early in the coronavirus pandemic and currently has more than more than 2,200 employees, Toast Chief Executive Officer Chris Comparato said in an interview.
‘Back on Our Horse’
“We made some tough choices in the first half of 2020, but then we got back on our horse and started to recruit again,” Comparato said.
Toast acquired a xtraCHEF, a restaurant management system, three months ago and isn’t ruling out future acquisitions.
“We do believe it’s important to build this muscle of inorganic growth over time,” Comparato said. “We’re going to continue to let our customers and the restaurant community point us to what’s next.”
Incorporated in 2011, the company’s platform was used by about 48,000 restaurants as of June 30 and had processed more than $38 billion in gross payments over the previous 12 months.
Toast’s losses and revenue roughly doubled to a net loss of $235 million on revenue of $704 million for the first six months of 2021, compared with a year earlier.
After the IPO, owners of the company’s Class B shares will hold 99.5% of the shareholder voting power in the company, according to the filings. The Class B shares carry 10 votes apiece, compared to one vote each for the Class A shares sold in the IPO.
Toast’s three largest investors are Tiger Global PIP, Bessemer Venture Partners and Technology Investment Dining Group, or their affiliates, according to the filings.
The IPO was led by Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. Toast shares are trading on the New York Stock Exchange under the symbol TOST.
©2021 Bloomberg L.P.