The soon-to-be public company projects a share price between $30 and $33.
Toast, a restaurant POS solution, is seeking to raise up to $825 million in its IPO.
The company, which provides a platform that connects restaurant POS, front of house, back of house, and guest-facing technology, will sell 21,739,131 shares, with underwriters having the option to purchase an additional 3,260,869. The share price will be between $30 and $33 per share. Assuming underwriters exercise their option, at that range Toast would raise between $750 million and $825 million and be valued between $15 billion and roughly $16.5 billion. Back in November, the company was valued at roughly $8 billion.
Toast said it cannot specify with certainty how it will use all of its net proceeds as of yet, but it is sure about using the funds for general corporate purposes, including working capital, operating expenses, and capital expenditures. It also may use a portion of the proceeds to acquire or invest in businesses, products, services, or technologies, although Toast does not have agreements or commitments in place at this time. Toast will have Class A and Class B common stock. Shares of Class A will be entitled to one vote per share, while shares of Class B will hold 10 votes per share.
The trajectory is a far cry from what Toast experienced at the beginning of the pandemic, when it was forced to lay off and furlough 50 percent of staff as restaurants sales dropped by 80 percent in most cities. To assist operators, Toast provided a one month credit of software fees and three months of free access to digital and marketing tools.
As COVID accelerated the need for stronger off-premises programs, so did Toast's business. By June 30, Toast had 47,492 locations on its platform, compared to 33,129 a year ago, and 19,891 in 2019. Revenue lifted to $823 million in 2020, a 24 percent increase year-over-year. In the six months ending June 30, revenue soared 105 percent to $704 million. For the month of June, Toast saw an average of over 5.5 million customer orders per day on its platform. In 2020, Toast swung a net loss of $248.2 million, compared to a loss of $209.4 million in 2019. In the six months ending June 30, it saw a net loss of $234.7 million.
“We’ve been committed to this vision for nearly a decade," the company states in its filing. "Our restaurant-specific platform is fully integrated across point of sale, operations, digital ordering and delivery, marketing and loyalty, team management, financial technology solutions, and platform services to provide restaurant operators everything they need to run their businesses successfully,” the filing continued. “In short, we’re democratizing technology so that restaurants of all sizes can compete on an even playing field.”
Toast will be the second restaurant tech company to go public this year, following digital ordering platform Olo, which hit the stock market in the spring. In Olo's case, it initially targeted shares at $16–$18 before upping to $20–$22. But it ended up at $25, with Olo raising roughly $450 million at a valuation of $3.6 billion.