Toast Inc. which assists restaurants to handle payments has raised $870 million in its initial public offering. The Boston-based company sold 21.7 million shares for $40 each as per a report by Bloomberg News.
Toast had earlier marketed the shares for $34-$36 per piece from its initially decided price of $30.
Toast’s IPO announcement comes after a long time. The company’s revenue sank by 80 percent as numerous restaurants across the country shut down due to pandemic.
The company had to cut 50 percent of its workforce by mid-2020 and had to resort to desperate measures to remain afloat. However, the company witnessed a swifter rebound than it had been anticipated.
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Toast Inc. benefited from restaurants that decided to remain open and diverted their business to takeout and mobile ordering.
Toast gave one-month credit of software fees to its clients and offered free access to its technology enabling gift card purchases, online ordering and takeout.
By the third quarter of 2020, the revenue started increasing again. By the year end, the company witnessed such upswing that it organized a secondary share sale.
This enabled its former and current employees could sell up to 25 percent of their vested shares at price that valued at $8 billion which is $3 billion more than what it was before the pandemic hit the world.
Toast’s Operations Prior Pandemic
Before the pandemic hit the world, Toast was thriving by offering technology to restaurants that enabled them combine their payment systems with multi-location controls and inventory management for eateries with multiple joints.
The company was valued by its investors at $5 billion in February 2020.
Toast is currently serving about 48,000 restaurants in the country. Its annual recurring revenue shot up by 118 percent in the second quarter from a year earlier.
It has processed over $38 billion in gross payments in the past 12 months. The company registered net revenue of $704 million and a loss of $235 million during the first six months of 2021.
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A majority of the company’s revenue comes from its financial technology solutions which involves primarily of fees paid by customers for payment transactions.
Less than 10% comes from subscriptions. Toast’s software permits diners to accept an order online. The diners can also utilize the guest data captured to create marketing and loyalty programs. Toast was founded in 2012 and is based in Boston, Massachusetts.
The company will trade on the New York Stock Exchange (NYSE). Its shares will trade under the ticker TOST. Currently, 21,739,131 shares are available.