Toast Inc has fetched a valuation of almost $33 billion in its New York Stock Exchange debut, as shares of the restaurant software firm jumped 63%, underscoring a deep investor appetite for fast-growing software firms.
The stock opened at $65.26, compared with its initial public offering price of $40 per share. The valuation marked a substantial jump from the company's last private funding round when it was valued at $4.9 billion in February of 2020.
Toast's listing comes at a time when digital transformation among restaurants has accelerated during the pandemic, and merchants have adopted Toast software to manage takeout system through first-party delivery or working with partners, including DoorDash Inc and Uber Eats.
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"We're in our early days, and we believe that we could be the unified platform that powers the restaurant industry," said Chris Comparato, chief executive at Toast.
The Boston-based company builds software that helps restaurants manage online orders and dine-in order, operate an on-demand delivery network and integrate payments.
Founded in 2011, Toast counts TPG, Tiger Global Management and Bessemer Venture Partners among its backers. It partnered with nearly 48,000 restaurant locations and processed more than $38 billion in gross payment volumes over the 12 months ended June 30.
As restaurant revenues plunged due to lockdowns and other restrictions, Toast cut its workforce and launched new features to cater to the shifts in dining behavior, including contactless ordering, indoor dining payments through QR codes, curbside notifications for takeout and deliveries on a flat-fee basis.
Toast's net loss widened to $235 million for the six months ended June 30, from $125 million a year earlier. Revenue, however, more than doubled to $704 million.
The company sold 21.7 million shares in its IPO, raising about $869.6 million. Its IPO was priced above an earlier targeted price range of $34 to $36 per share.
Goldman Sachs, Morgan Stanley and JP Morgan were the lead underwriters for Toast's IPO.
The above news follows news that Toast Inc priced its US IPO well above the target range to raise $869.6 million, valuing the company at $19.98 billion, and that Toast said in a statement that it sold 21.7 million shares at $40 apiece.
The above news also follows previous news that Toast Inc was aiming for a valuation of up to $18 billion after raising the price range for its initial public offering in the US.
At that time, the company said that it was looking to sell nearly 21.7 million shares priced between $34 and $36 each, according to a regulatory filing on Monday September 20. It had earlier aimed to price the shares between $30 and $33 each.
At the top end of that range, Toast would have raised up to $782.6 million in its IPO.
As of June 30, the company has partnered with nearly 48,000 restaurant locations and has processed more than $38 billion in gross payment volume over the past 12 months, the filing showed.
Toast will list its stock on the New York Stock Exchange under the symbol "TOST".
Restaurant Payments App Company Sunday Raises $100m
In other restaurant technology company news, Sunday - a payments application used in restaurants that was founded by well-known French entrepreneurs Christine de Wendel and Victor Lugger - has raised $100 million, said the company, highlighting another successful French tech fundraising.
The fundraising for Sunday came just days after France's blockchain-based fantasy soccer game Sorare raised $680 million in a funding round led by SoftBank, with French President Emmanuel Macron keen to promote the country's tech industry.
Sunday's co-founders include Lugger and Tigrane Seydoux, who set up the "Big Mamma" chain of Italian restaurants often favoured by Paris' fashionable crowd, seen in areas of the capital such as the bustling Batignolles district.
The company said its latest fundraising had been led by Coatue, with participation from partners of DST Global.
"This new investment round is a remarkable opportunity for Sunday to build a powerful tech stack and develop new product features such as ordering & loyalty programs. It also allows us to accelerate in the US market by growing our sales, operations and partnerships teams," said de Wendel.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.