US-based restaurant organisation technology provider Toast is floating on the New York Stock Exchange today in an $870m initial public offering representing an exit for internet and technology group Alphabet.
The offering consists of just over 21.7 million shares priced at $40.00 each, above a $34 to $36 range upgraded from $30 to $33 by the company on Monday. The IPO price gives it a valuation of about $20bn.
Toast has built a software platform which combines point-of-sale technology with team management, marketing, loyalty, digital ordering and delivery tools, in essence serving as a restaurant operating system that integrates onsite and online ordering.
The company made a $248m net loss in 2020, up from $209m the previous year, but increased revenue from $665m to $823m over the same period.
Alphabet subsidiary GV took part in a $30m series B round for Toast in 2016 that was led by Bessemer Venture Partners (BVP) and backed by unnamed private investors, taking the company’s overall debt and equity financing to $40m.
Lead Edge Capital and Generation Investment Management co-led Toast’s $101m series C round the following year, participating alongside BVP. It added $115m in a 2018 series D led by funds and accounts managed by T Rowe Price and backed by Tiger Global Management and unnamed existing investors.
Tiger Global and TCV co-led the company’s $250m series E round in 2019 at a $2.7bn valuation, investing together with BVP, Lead Edge Capital and funds and accounts managed by T Rowe Price.
Toast hiked its valuation to $4.9bn a $400m series F round in February 2020, raising the cash from TPG, Greenoaks Capital, BVP, Tiger Global, TCV, G Squared, Light Street Capital, Durable Capital Partners, Alta Park Capital and funds and accounts advised by T Rowe Price.
The company’s largest shareholders are Tiger Global (12.2% post-IPO), BVP (11.9%), founding investor Steven Papa’s Technology Investment Dining Group (11.1%), funds and accounts advised by T Rowe Price (5.7%), co-founder and chief technology officer Jonathan Grimm (5.4%) and TCV (5.2%).
Goldman Sachs, Morgan Stanley and JP Morgan are lead book-running managers for the IPO while KeyBanc Capital Markets, William Blair and Piper Sandler are book-running managers and Canaccord Genuity, Needham & Company and R Seelaus are co-managers.
The underwriters have the choice over the next 30 days to buy up to 3.26 million additional shares, potentially increasing the size of the offering to $1bn.
