Toast, a startup that makes restaurant management software, is gearing up to raise $714.4 million in its upcoming initial public offering. The startup, which is selling 21.7 million shares priced at $30 to $33 per share, is expected to have a valuation of $16 billion.
The IPO comes as business for Toast has been booming ever since the pandemic. With restaurants shut down, Toast shifted its focus to helping restaurants manage delivery and accept contactless payments, which boosted its sales. In February the startup had a valuation of around $5 billion, counting TPG, Tiger Global Management, and American Express Ventures among its backers.
Toast is among the startups to benefit from demand for online ordering, curbside pickup, and delivery. The company has been around for ten years and when it goes public will list on the New York Stock Exchange under the ticker “TOST.” Revenue at the startup is made up of recurring software-as-a-service income and payments revenue.
In 2020 Toast grew 24% but in the first half of this year growth has accelerated with sales up 105%. That implies Toast’s shift to focus on delivery and contactless payments is paying off. With business booming and sales growing, it makes sense why Toast is choosing now to go public.
Toast is joining a growing list of startups which are gearing up to tap the public markets this year. Other big name software-as-a-service startups launching IPOs this year include Freshworks, Thoughtworks, and ForgeRock. All of the companies are sporting lofty valuations as they gear up to debut in a red-hot IPO market. So far in the first six months of this year 213 companies have gone public, raising a total of $70 billion. There are also about 87 companies looking to raise a combined $20 billion before the year’s end.
Toast is going public amid surging demand for IPOs and strong sales growth. It will be interesting to see if investors reward this startup once it makes its public debut.
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