Toast, a widely used restaurant POS platform, hit the stock market with a bang Wednesday, raising roughly $870 million in its IPO.
Originally, the tech company projected a share price range of $30 to $33, but that was soon lifted to $34 to $36. Toast then announced the offering of 21,739,131 shares at $40 per share, with underwriters having the option to purchase up to an additional 3,260,869. The company opened on the New York Stock Exchange at $65.26 per share, an increase of more than 60 percent from the IPO price. At that level, the company is valued at more than $32 billion. Back in November 2020, the company was valued at roughly $8 billion. The company is trading under the symbol “TOST.”
Toast, which fully integrates POS, operations, digital ordering and delivery, marketing, team management, and financial technology, will use net proceeds from the IPO for general corporate purposes, such as working capital, operating expenses, and capital expenditures, to potentially acquire or invest in businesses, products, services, or technologies, and to pledge 1 percent to social impact initiatives over the next 10 years.
As of June 30, the POS solution had nearly 47,500 locations using its platform, up from 33,129 in 2020 and 19,891 in 2019. In 2020, revenue soared to $823 million, a 24 percent increase year-over-year. Toast is well on pace to break that revenue mark this year; the system earned $704 million in revenue during the six months ending June 30, a 105 percent rise versus the year-ago period.
In 2020, Toast swung a net loss of $248.2 million, compared to a loss of $209.4 million in 2019, and in the six months ending June 30, it saw a net loss of $234.7 million. Toast attributed those losses to investing “significant additional funds in expanding our business, sales, and marketing activities, research and development as we continue to build software and hardware designed specifically for the restaurant industry, and maintaining high levels of customer support.”
The company’s acceleration toward the stock market is a major leap from where it was in the spring of 2020, when it laid off half of its staff as restaurant sales plummeted by 80 percent in most cities. However, with jurisdictions restricting on-premises business and customers hesitant to go out, restaurants made a hard pivot toward digital innovation, thereby boosting Toast’s business throughout 2020.
Goldman Sachs & Co. LLC, Morgan Stanley, and J.P. Morgan are acting as lead book-running managers for the proposed offering. KeyBanc Capital Markets, William Blair, and Piper Sandler are acting as book-running managers for the proposed offering. Canaccord Genuity, Needham & Company, and R. Seelaus & Co., LLC are acting as co-managers for the proposed offering.
