Toast costs for the IPO at $ 40, above the anticipated vary
Toast point of sale system
Restaurant technology company Toast put its IPO Tuesday at $ 40 a share, according to a person familiar with the matter who asked not to be named as the announcement is not yet public. The offer was above the expected bandwidth and valued the company at around $ 20 billion.
Toast had expected to sell stocks for $ 34 to $ 36 apiece after the range was raised from $ 30 to $ 33. The company trades on the New York Stock Exchange under the symbol “TOST”.
Toast’s IPO comes after a roller coaster ride during the pandemic, which saw sales initially drop 80% as restaurants closed and cities across the country closed. The company cut half of its workforce in mid-2020 and took desperate measures to stay afloat.
But like other hospitality-focused tech companies like Airbnb and TripActions, the recovery has been much faster than expected. Restaurants stayed open and shifted their businesses to take-out, delivery and mobile ordering, which played right into the sweet spot of toast.
Toast has initially credited its customers with software fees for one month and given them free access to its technology that enables takeout, online ordering and gift card purchases.
By the third quarter of 2020, sales increased again compared to the previous year. In November, the company saw such a boom that it orchestrated a second share sale so current and former employees could sell up to 25% of their vested shares at a price that valued Toast at $ 8 billion.
Before the Covid-19 pandemic, Toast flourished selling technology to restaurants that helped them combine their payment systems with things like inventory management and multilocation controls for restaurants with more than one location. Investors valued the company at $ 5 billion in February 2020.
Toast now announces that it serves 48,000 restaurant locations as of the end of June, up from 27,000 in 2019. Annual recurring revenue rose 118% year over year to $ 494 million in the second quarter. Most of Toast’s revenue comes from what it calls financial technology solutions, which are mostly made up of fees paid by customers for payment transactions. Less than 10% comes from subscriptions.